Question

Purchasing office supplies on account for $100 is recorded as:

a. supplies 100 accounts payable 100
b. cash 100 supplies 100
c. supplies 100 cash 100
d. accounts payable 100 supplies 100

Answer 1

Purchasing office supplies on account for $100 is correctly recorded as a debit to the Supplies account and a credit to Accounts Payable for $100, aligning with the double-entry accounting principle. The correct option is A.

Step-by-step explanation:

The correct way to record purchasing office supplies on account for $100 would be to debit the supplies account, because we are increasing an asset (supplies) and to credit the accounts payable account, since we owe money, which is a liability.

So the correct entry is: Supplies 100 / Accounts Payable 100. This records that the value of the supplies we now own has increased, while simultaneously acknowledging that our liabilities - the money we owe to purchase those supplies - has also increased.

In accounting, this principle is part of the double-entry system which ensures that every transaction is recorded in two accounts: one debit and one credit to keep the accounting equation balanced.