Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 21 - No. 8)
If a company purchases goods on credit, which of the following is correct?
Debit Purchases, Credit Cash
Debit Accounts Payable, Credit Purchases
Debit Purchases, Credit Accounts Payable
Debit Cash, Credit Purchases
Explanation
Purchasing goods on credit increases purchases(debit) and increases Accounts Payable (credit).
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