mikes auto shop purchases supplies on account from automotive supply for $435. the journal entry for mikes…

mikes auto shop purchases supplies on account from automotive supply for $435. the journal entry for mikes auto shop to record this transaction is: a. debit accounts payable/automotive supply, $435; credit supplies, $435. b. debit supplies, $435; credit accounts payable/automotive supply, $435. c. debit accounts receivable/automotive supply, $435; credit supplies, $435. d debit supplies, $435; credit accounts receivable/automotive supply, $435.

mikes auto shop purchases supplies on account from automotive supply for $435. the journal entry for mikes auto shop to record this transaction is: a. debit accounts payable/automotive supply, $435; credit supplies, $435. b. debit supplies, $435; credit accounts payable/automotive supply, $435. c. debit accounts receivable/automotive supply, $435; credit supplies, $435. d debit supplies, $435; credit accounts receivable/automotive supply, $435.

Answer

Answer:

B. debit Supplies, $435; credit Accounts Payable/Automotive Supply, $435.

Explanation:

Step1: Identify the nature of accounts

When purchasing supplies on - account, Supplies is an asset account and Accounts Payable is a liability account.

Step2: Apply debit - credit rules

Assets increase with a debit. Since supplies are being acquired (an increase in assets), Supplies is debited for $435. Liabilities increase with a credit. Since the company owes Automotive Supply for the supplies (an increase in liability), Accounts Payable/Automotive Supply is credited for $435.