In the transaction 'Paid cash for supplies, $1,000', which account is credited?

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Multiple Choice

In the transaction 'Paid cash for supplies, $1,000', which account is credited?

Explanation:
When you pay cash for supplies, you’re decreasing cash and increasing the supplies you own. In double-entry bookkeeping, decreases are recorded as credits and increases as debits. So the cash account is credited because cash is going down, while the supplies account would be debited to reflect the increased asset. This isn’t linked to liabilities or equity in this moment, and it wouldn’t involve Revenue. It also wouldn’t be Accounts Payable here since you paid cash rather than buying on credit.

When you pay cash for supplies, you’re decreasing cash and increasing the supplies you own. In double-entry bookkeeping, decreases are recorded as credits and increases as debits. So the cash account is credited because cash is going down, while the supplies account would be debited to reflect the increased asset. This isn’t linked to liabilities or equity in this moment, and it wouldn’t involve Revenue. It also wouldn’t be Accounts Payable here since you paid cash rather than buying on credit.

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