Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 33 - No. 31)
What is the journal entry when a company pays an invoice from a supplier, where the original purchase was on credit?
Debit Cash, Credit Accounts Payable.
Debit Accounts Payable, Credit Cash.
Debit Purchases, Credit Cash.
Debit Cash, Credit Purchases.
Explanation
Paying off a debt (Accounts Payable) is debited, with a credit to Cash.
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