Purchased Supplies On Account & For Cash

Purchasing of Office Supplies can be treated as Assets if these are unused or in hand in the business and provide probable benefits in future according to the Accrual Basis of Accounting but if these are consumed for running the daily operations of the business, then these are considered as Expenses in Accounting as these are consumed or used during the accounting period.

The company can purchase supplies on account or credit or for cash. When supplies purchased on account then Accounting Journal Entry is recorded as follows:

                                     Office Supplies a/c  XXX

                                                                  Accounts Payable a/c  XXX

                                                      (Purchased Supplies On Account)

When supplies purchased for cash, then we replace Accounts Payable Account with Cash Account as shown below:

                                  Office Supplies a/c  XXX

                                                                   Cash a/c  XXX

                                                    (Purchased Supplies for Cash)

So, we can see that both entries are the same for office supplies as in both cases, it is debited while only credit side is changed from accounts payable account to cash account.

A purchase of supplies on account is recorded in the Purchase Journal as it is used to record Credit Purchases, services on account and supplies on account.

A purchase of supplies for cash is recorded in the Cash Payment Journal / Cash Disbursement Journal as it is used to record all cash payments.