The Purchase of Supplies For Cash or Bank Will Affect What?

The purchase of Supplies for cash affects supplies account and cash or bank account.

For Example, if a company purchased supplies for cash / bank Rs. 5000, the following journal entry is recorded as shown below:

                                                       Supplies a/c  5000

 

                                                                            Cash a/c / Bank a/c  5000

 

                                                       (Supplies Purchased For Cash / Bank)

As supplies, being a current asset, is increasing, so we debit it and cash or bank account as a current asset is decreasing, so we credit it.

So, the purchase of supplies for cash / bank account results in an increase in supplies account and a decrease in cash or bank account.