The Entry to Record the Purchase of Supplies on Account

question 49

Multiple Choice

The entry to record the purchase of supplies on account would include a:

• A) credit to the Accounts Payable account
• B) debit to the Retained Earnings account
• C) credit to the Cash account
• D) credit to the Supplies account

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Definitions:

Compounded Monthly

The process where interest earned is added to the principal, so that from that moment on, the interest that has been added also earns interest.

Motor Home

A type of self-propelled recreational vehicle (RV) that offers living accommodation combined with a vehicle engine.

Extra Payments

Payments made on a loan that exceed the minimum required payment, often used to reduce the loan balance more quickly.

Compounded Monthly

A method of calculating interest in which the accrued interest is added to the principal sum every month, so that each subsequent interest calculation is based on a slightly higher amount.