Which journal entry records purchasing supplies on account?

Which journal entry records purchasing supplies on account?

• A. Debit Supplies; Credit Accounts Payable
• B. Debit Accounts Payable; Credit Supplies
• C. Debit Cash; Credit Supplies
• D. Debit Supplies; Credit Cash

Answer: (A)

When you purchase supplies on account, you’re getting an asset now and incurring a liability to pay later. The entry should increase supplies and increase accounts payable. So you debit Supplies to reflect the asset increase and credit Accounts Payable to record the obligation. If you paid with cash instead of on account, you’d debit Supplies and credit Cash. Debiting Accounts Payable would incorrectly affect the liability, and debiting Supplies with a credit to Cash would suggest paying upfront rather than buying on account.

When you purchase supplies on account, you’re getting an asset now and incurring a liability to pay later. The entry should increase supplies and increase accounts payable. So you debit Supplies to reflect the asset increase and credit Accounts Payable to record the obligation.

If you paid with cash instead of on account, you’d debit Supplies and credit Cash. Debiting Accounts Payable would incorrectly affect the liability, and debiting Supplies with a credit to Cash would suggest paying upfront rather than buying on account.