Final answer:
The transaction will not balance with incorrect debit and credit amounts; they must match the purchase amount of $920 to maintain accounting balance.
Step-by-step explanation:
No, the transaction will not balance if a cash purchase of supplies for $920 is journalized and posted as a debit to Supplies for $92 and a credit to Cash for $92. In accounting, the debits and credits for each transaction must balance, meaning the total amount debited must equal the total amount credited for each individual transaction.
To correct the journal entry, you should debit the Supplies account for the full purchase amount of $920 and credit the Cash account for the same amount. This reflects a decrease in Cash and an increase in Supplies, maintaining balance in the accounting equation.
The original mistake was a misinterpretation of the transaction value in both the debit and credit sides. This error in the journal entry would lead to an imbalance in the financial statements, misstating both the Supplies and Cash accounts, and ultimately affecting the accuracy of the company's financial position.