If you use cash to purchase the supplies, then the cash will decrease and the supplies will be expensed against the income statement. How does this affect the accounting equation? …
The liabilities will increase and the supplies will be expensed against the income
.
How does purchasing supplies on account affect the accounting equation?
Purchasing supplies on account
increases supplies (i.e., increases assets)
and increases a liability account called accounts payable. Thus, asset increase and liabilities increase.
How is the accounting equation affected when cash is paid for supplies?
When cash is paid for supplies,
assets increase and liabilities decrease
. When an account on one side of the accounting equation is increased, there must also be an increase on the other side to keep the equation in balance.
Which accounts are affected when the company buys supplies for cash?
4) what are the two accounts affected when a business buys supplies on account? The accounts affected are
supplies and accounts payable
.
Is paying cash for supplies an asset or liability?
The office supplies account is an asset account, in which its normal balance is on the debit side. The company usually records the office supplies that it paid the cash for as
an asset
on the balance sheet and only when such supplies are used, does the company record them as the expense on the income statement.
Is utility expense a debit or credit?
You will
debit
the utilities expense account and credit accounts payable. When the bill or invoice is paid, it will affect accounts payable and cash. Because you are reducing the liability of accounts payable, it is the debit side of the transaction.
What is the most common type of withdrawal by an owner from a business?
Withdrawals are assets taken out of a business for the owner's personal use. The most common type of withdrawal by an owner from a business is
the withdrawal of cash
.
What two accounts are affected when a business receives cash for a loan?
The company receives cash from a bank loan.
The company's asset account Cash increases
. The company's liabilities (such as Notes Payable or Loans Payable) have increased. Owner's (Stockholders') Equity is not involved in this transaction.
What is ending owner's equity?
Ending Owner's Equity. =
Beginning Owner's Equity + Investment by Owner + Net Income
. Net Income = Revenues – Expenses + Gains – Losses. Ending Owner's Equity. = Beginning Owner's Equity + Investment by Owner.
What is the purchase of an asset for cash?
Question: The purchase of an asset for cash: …
increases assets and stockholders' equity
.
What happens when a business pays cash for supplies?
A purchase of supplies on account is recorded in the liabilities and supplies accounts. … If you use cash to purchase the supplies,
then the cash will decrease and the supplies will be expensed against the income statement
.
How do you record purchases of cash with supplies?
When you buy office supplies for your company, the purchase affects the supplies expense account (equity subaccount) and the cash account (asset). Record the purchase
by increasing the supplies expense account with a debit and decreasing the cash account with a credit
.
What is the journal entry for withdraw cash for personal use?
The journal entry for cash withdrawn for personal use goes in
an account called Drawing or sometimes Withdrawals
. If you take $20 from the till to go out to dinner, you debit Drawing for $20 and credit Cash for $20.
What are some examples of miscellaneous expenses?
- Clothing or job uniforms.
- Advertising.
- Subscription services for work.
- Accounting and legal fees.
- Interest and bank charges.
- Tools and supplies.
- Job search costs.
- Home office supplies.
What is the entry of drawings?
A journal entry to the drawing account consists of a
debit to the drawing account and a credit to the cash account
. A journal entry closing the drawing account of a sole proprietorship includes a debit to the owner's capital account and a credit to the drawing account.
Is Internet a utility expense?
Yes,
internet would be considered a utility
.
