Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 18 - No. 40)
When a company pays its suppliers with cash, what is the normal journal entry?
Debit Accounts Payable, Credit Cash.
Debit Cash, Credit Accounts Payable.
Debit Sales Revenue, Credit Cash.
Debit Inventory, Credit Cash.
Explanation
The payment reduces cash and reduces the company's obligation to the supplier (Accounts Payable).
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