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Lonneisha's Quilt Shop purchased merchandise for cash from Patch Quilt Distributors for $550. The journal entry for Lonneisha's Quilt Shop to record this transaction is:

User Oopsdazie
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The journal entry for Lonneisha's Quilt Shop's $550 merchandise purchase from Patch Quilt Distributors is a debit to Inventory and a credit to Cash, each for $550.

Lonneisha's Quilt Shop's transaction of purchasing merchandise from Patch Quilt Distributors for $550 cash can be recorded with a simple double-entry bookkeeping system. To record this transaction, you would make the following journal entry:

  • Debit Inventory for $550
  • Credit Cash for $550

This journal entry reflects an increase in inventory, which is an asset, and a decrease in cash, which is also an asset. Since Lonneisha's Quilt Shop paid in cash, there is a direct decrease in the cash account and no liability is created.

User Sam Samson
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