Question

1. On October 1, 2020 a company purchased supplies from a vendor on credit for $2,500. The journal entry includes a debit to ____ and a credit to _____.

a. supplies

b. cash

c. account payable

d. accounts receivable

2. On November 1, 2020 a company paid cash to a vendor for the purchase on October 1 (in question 28) for $2,500. The journal entry includes a debit to____ and a credit to _____.

a. supplies

b. cash

c. account payable

d. accounts receivable

Answer 1

Ans. 1	a. Supplies , c. Accounts payable
	Explanations: When supplies (asset) are purchased, the total assets
	would increase and the liabilities (accounts payable) will also increase because the asset is purchased on credit.
	The following journal entry would be prepared for this transaction :
	Date	General Journal	Debit	Credit
	1-Oct-20	Supplies	$2,500
		Accounts payable		$2,500
		(To record the supplies purchassed on account)
Ans. 2	c. Accounts payable, b. cash
	Explanations: When the amount is paid for the liability, the assets (cash) and liabilities (accounts payable)
	both were decrease.
	The following journal entry would be prepared for this transaction :
	Date	General Journal	Debit	Credit
	1-Nov-20	Accounts payable	$2,500
		Cash		$2,500
		(To record the cash paid for supplies)