When a company purchases office supplies for cash, which account should be debited?

• A. Service Revenue
• B. Accounts Payable
• C. Cash
• D. Office Supplies

Answer: (D)

Verified step by step guidance

1. Understand the nature of the transaction: The company is purchasing office supplies, which are considered an asset, and paying for them in cash. This means one asset account (Office Supplies) increases, while another asset account (Cash) decreases.
2. Recall the basic accounting principle: In double-entry accounting, every transaction affects at least two accounts. One account is debited, and the other is credited.
3. Determine which account is debited: When an asset increases, it is debited. Since the company is acquiring office supplies, the Office Supplies account should be debited.
4. Determine which account is credited: When an asset decreases, it is credited. Since the company is paying cash, the Cash account should be credited.
5. Apply the journal entry format: The journal entry for this transaction would be: Debit Office Supplies and Credit Cash. This ensures the accounting equation (Assets = Liabilities + Equity) remains balanced.