Question

In 2017, the City ordered supplies that cost 4M, received supplies that cost 3.5M, paid for supplies that cost 3M and used supplies that cost 3.3M: Record order of supplies

Answer 1

To record the order of supplies, you would increase the supplies by $4M and increase the accounts payable by $4M.

Step-by-step explanation:

To record the order of supplies, you would use the accounting equation, which is Assets = Liabilities + Owner's Equity. In this case, the supplies would fall under the category of assets. The order of supplies would increase the assets of the City, so you would record it as an increase in supplies and a corresponding increase in accounts payable, which is a liability.

For example:

Supplies + Accounts Payable

To record the order of supplies that cost $4M, you would increase the supplies by $4M and increase the accounts payable by $4M.