Question

On January 14, Welsford Agency purchased supplies of $500 on account. When the company records the purchase it will include an increase to A : Supplies and an increase to Accounts Payable. B : Supplies and a decrease to Cash. C : Accounts Receivable and a decrease to Supplies. D : Supplies Expense and an increase to Accounts Receivable.

Answer 1

A.

Step-by-step explanation:

The company should register the debit (increase) to Supplies and the credit (increase) to Accounts Payable.

The affected accounts are:

-Supplies, an inventory account. The amount of purchase must be debit because it is increasing. if it drecrese, there is a credit registration.

-Accounts payable, if the purchase is on account. The amount of purchase must be credit, as an increase. When there is a debit in this account, the debt has been canceled.

-Cash, if the purchase is an exchange of cash.