Question

Smith Co. purchased $8,000 of supplies on credit. How would this transaction be recorded?Enter $8,000 debit to the Supplies account on the left side; Enter $8,000 credit on the right side on the Accounts Payable account.

Answer 1

Purchase Account will be debited with amount of $8000 and Creditors Account will be credited with amount of $8000.

Explanation: This transaction will have two effects. The first one will be in purchase account, as we purchase supplies.It will be debited with $8000. The another effect will be credited in creditors account as we purchased on credit so we have to pay to creditors