Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 37 - No. 10)
A company pays a supplier for inventory purchased on credit. Which accounts are affected?
Debit Accounts Payable, Credit Cash.
Debit Cash, Credit Accounts Payable.
Debit Inventory, Credit Cash.
Debit Cash, Credit Inventory.
Explanation
Payment decreases cash (credit) and reduces accounts payable (debit).
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