Question

In: Accounting

Journalize and explain the following...a company purchased supplies with a check of $950.

Journalize and explain the following...a company purchased supplies with a check of $950.

Solutions

Expert Solution

The journal entry to record this transaction is
Account Title Debit Credit
Supplies 950
Cash 950
Both supplies & cash are real accounts
For recording transcations pertaining to real accounts,the accounting rule is
Debit       what comes in   &
Credit       what goes out.
so, under this we debit the supplies that have come in &
Credit Cash that has gone out
By recording as above,
the supplies account which normally has a debit balance , increases by this additional debit of $ 950 &
Cash that normally has a debit balance , decreases by $ 950 , due to the above crediting of the account  
satisfying the double entry -effect of book-keeping--(every debit /credit should have a corresponding credit/debit)
Here, both supplies & cash have balances that are carried from period to period--so they will appear on the fiscal-year -end Balance sheet , as current assets.

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