The business bought supplies on account. To record this,
A) an expense is debited and a liability is credited.
B) an asset is debited and an asset is credited.
C) an asset is debited and a liability is credited.
D) None of these are correct.

Question

Quizplus · Accepted Answer

When supplies are bought on account, it means that the business is getting the supplies but not paying for them immediately. Therefore, an asset (supplies) is debited to reflect that they have been acquired, and a liability (accounts payable) is credited to show that the business owes money for the supplies.

The Business Bought Supplies on Account