Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 4 - No. 27)
A company purchases goods on credit. The correct journal entry is:
Debit Purchases, Credit Cash
Debit Accounts Payable, Credit Purchases
Debit Purchases, Credit Accounts Payable
Debit Cash, Credit Purchases
Explanation
Purchases increase, and accounts payable increase because it is credit.
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