Question

current attempt in progress
on january 14, crane industries purchased supplies of $740 on account. the entry to record the purchase will include

a debit to supplies and a credit to accounts payable.

a debit to accounts receivable and a credit to supplies.

a debit to supplies expense and a credit to accounts receivable.

a debit to supplies and a credit to cash.

Explanation:

When a company purchases supplies on account, it means the company receives the supplies (an asset increase, so debit Supplies) and owes the payment (a liability increase, so credit Accounts Payable).

• The second option is wrong because Accounts Receivable is for money owed to the company, not related here, and crediting Supplies would decrease it, which is incorrect.
• The third option is wrong as Supplies Expense is for when supplies are used, and Accounts Receivable is not involved in a purchase on account.
• The fourth option is wrong because "on account" means no cash is paid immediately, so crediting Cash is incorrect.

Answer:

A. a debit to Supplies and a credit to Accounts Payable.