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Your business purchased office supplies of $2,500 on account. The journal entry to record this transaction is as follows: OA. Accounts and Explanation Debit Credit Cash 2,500 Accounts Payable 2,500 O B. Accounts and Explanation Debit Credit Accounts Payable 2,500 Office Supplies 2,500 C. Accounts and Explanation Debit Credit Office Supplies 2,500 Accounts Payable 2,500 O D. Accounts and Explanation Debit Credit Office Supplies 2,500

Your business purchased office supplies of $2,500 on account. The journal entry to record this transaction is as follows: OA. Accounts and Explanation Debit Credit Cash 2,500 Accounts Payable 2,500 O B. Accounts and Explanation Debit Credit Accounts Payable 2,500 Office Supplies 2,500 C. Accounts and Explanation Debit Credit Office Supplies 2,500 Accounts Payable 2,500 O D. Accounts and Explanation Debit Credit Office Supplies 2,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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### Journal Entry for Purchase of Office Supplies on Account When a business purchases office supplies for $2,500 on account, the journal entry required to record this transaction is done by recognizing the increase in office supplies and the liability created (accounts payable) due to the credit purchase. Below are different recording options showing possible journal entries. The correct journal entry is detailed at the bottom. --- #### A. **Accounts and Explanation** | Debit | Credit | |-------|--------| | Cash | 2,500 | | Accounts Payable | 2,500 | #### B. **Accounts and Explanation** | Debit | Credit | |-------|--------| | Accounts Payable | 2,500 | | Office Supplies | 2,500 | #### C. **Accounts and Explanation** | Debit | Credit | |-------|--------| | Office Supplies | 2,500 | | Accounts Payable | 2,500 | #### D. **Accounts and Explanation** | Debit | Credit | |-------|--------| | Office Supplies | 2,500 | | Accounts Receivable | 2,500 | --- ### Correct Entry: The correct journal entry to record the purchase of office supplies on account for $2,500 is: #### **C.** **Accounts and Explanation** | Debit | Credit | |-------|--------| | Office Supplies | 2,500 | | Accounts Payable | 2,500 | Explanation: When making an entry for an office supplies purchase on account, you debit Office Supplies to increase the asset and credit Accounts Payable to reflect the liability. This complies with the double-entry accounting system where each transaction affects at least two accounts.
Transcribed Image Text:### Journal Entry for Purchase of Office Supplies on Account When a business purchases office supplies for $2,500 on account, the journal entry required to record this transaction is done by recognizing the increase in office supplies and the liability created (accounts payable) due to the credit purchase. Below are different recording options showing possible journal entries. The correct journal entry is detailed at the bottom. --- #### A. **Accounts and Explanation** | Debit | Credit | |-------|--------| | Cash | 2,500 | | Accounts Payable | 2,500 | #### B. **Accounts and Explanation** | Debit | Credit | |-------|--------| | Accounts Payable | 2,500 | | Office Supplies | 2,500 | #### C. **Accounts and Explanation** | Debit | Credit | |-------|--------| | Office Supplies | 2,500 | | Accounts Payable | 2,500 | #### D. **Accounts and Explanation** | Debit | Credit | |-------|--------| | Office Supplies | 2,500 | | Accounts Receivable | 2,500 | --- ### Correct Entry: The correct journal entry to record the purchase of office supplies on account for $2,500 is: #### **C.** **Accounts and Explanation** | Debit | Credit | |-------|--------| | Office Supplies | 2,500 | | Accounts Payable | 2,500 | Explanation: When making an entry for an office supplies purchase on account, you debit Office Supplies to increase the asset and credit Accounts Payable to reflect the liability. This complies with the double-entry accounting system where each transaction affects at least two accounts.
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