For each of the following activities, select the correct effect on the general ledger accounts:1. A company purchases office supplies for cash.2. The company receives cash from a customer for a previous sale.Which of the following correctly matches the activities to their effects?A) 1: Debit Supplies, Credit Cash; 2: Debit Accounts Receivable, Credit CashB) 1: Debit Cash, Credit Supplies; 2: Debit Cash, Credit Accounts ReceivableC) 1: Debit Supplies, Credit Cash; 2: Debit Cash, Credit Accounts ReceivableD) 1: Debit Supplies, Credit Accounts Payable; 2: Debit Cash, Credit Sales

• A. B) 1: Debit Cash, Credit Supplies; 2: Debit Cash, Credit Accounts Receivable
• B. C) 1: Debit Supplies, Credit Cash; 2: Debit Cash, Credit Accounts Receivable
• C. A) 1: Debit Supplies, Credit Cash; 2: Debit Accounts Receivable, Credit Cash
• D. D) 1: Debit Supplies, Credit Accounts Payable; 2: Debit Cash, Credit Sales

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the accounting principle of double-entry bookkeeping, which requires every transaction to have equal debits and credits. This ensures the accounting equation (Assets = Liabilities + Equity) remains balanced.
2. Step 2: Analyze the first activity: 'A company purchases office supplies for cash.' Purchasing supplies increases the Supplies account (an asset), which is debited. Paying cash decreases the Cash account (another asset), which is credited. The journal entry would be: Debit Supplies, Credit Cash.
3. Step 3: Analyze the second activity: 'The company receives cash from a customer for a previous sale.' Receiving cash increases the Cash account (an asset), which is debited. Since the sale was recorded earlier, the Accounts Receivable account (another asset) decreases, which is credited. The journal entry would be: Debit Cash, Credit Accounts Receivable.
4. Step 4: Compare the journal entries derived from the analysis to the options provided. For activity 1, the correct effect is Debit Supplies, Credit Cash. For activity 2, the correct effect is Debit Cash, Credit Accounts Receivable.
5. Step 5: Match the derived journal entries to the correct option. The correct answer is C) 1: Debit Supplies, Credit Cash; 2: Debit Cash, Credit Accounts Receivable.