Question

As inventory part items with balances are entered in the QuickBooks desktop set up window and recorded on the item list, a journal entry is recorded in the journal report to record a debit to _ and a credit to _.

Answer 1

In QuickBooks desktop, entering inventory part items with balances results in a debit to Inventory and a credit to Accounts Payable or Opening Balance Equity.

Step-by-step explanation:

As inventory part items with balances are entered in the QuickBooks desktop setup window and recorded on the item list, a journal entry is recorded in the journal report to record a debit to Inventory and a credit to Accounts Payable or Opening Balance Equity, depending on whether the balance is being entered as an initial balance for company setup or as part of an ongoing accounting process. In accounting, the concept of debits and credits must always balance, which means for every transaction, the total debits must equal the total credits to maintain the integrity of the financial statements. When businesses add inventory items, they are increasing their assets (inventory), which are recorded as a debit, and simultaneously acknowledging a liability (accounts payable) or drawing upon owner's equity (opening balance equity) to balance the transaction, which is recorded as a credit.