Purchase Office Supplies on Account

When a business purchases office supplies on account it needs to record these as supplies on hand. As the supplies on hand are normally consumable within one year they are recorded as a current asset in the balance sheet of the business.

Purchase Office Supplies on Account Journal Entry Example

For example, suppose a business purchases pens, stationery and other office consumables for 250, and is given credit terms from the supplier.

The accounting records will show the following purchased supplies on account journal entry:

Purchase Office Supplies on Account Journal Entry
Account Debit Credit
Supplies on hand 250
Accounts payable 250
Total 250 250

Bookkeeping Explained

The business has received consumable office supplies (pens, stationery, etc.) and holds these as a current asset as supplies on hand.

The credit entry represents the liability to pay the supplier in the future for the goods supplied.

Purchase Office Supplies on Account Accounting Equation

The accounting equation, Assets = Liabilities + Owners Equity means that the total assets of the business are always equal to the total liabilities plus the total equity of the business This is true at any time and applies to each transaction. For this transaction the accounting equation is shown in the following table.

Purchase Office Supplies on Account Accounting Equation
Assets = Liabilities + Owners Equity
Supplies on hand = Accounts payable + None
250 = 250 + 0

In this case an asset (supplies on hand) increases representing office consumables held by the business for immediate use. The other side of the accounting equation is the liability to pay the supplier for the items (accounts payable) at a future date.

Popular mdct.ru Examples

This purchase office supplies on account journal entry is one of many examples used in mdct.ru, discover another at the links below.

Purchase Office Supplies on Account November 6th, 2016Team

You May Also Like

Related pages

npv of perpetuityhow to calculate direct materials purchasedbasic accounting spreadsheetannuity loan formulashrinkage meaningdupont formula exampleadjusting entries worksheetaccounting accrual vs cashfactor accounts receivablecapital lease gaapaccounts receivable credit or debitbookkeeping general ledgershare repurchase journal entrypresent value of cash flows excelthe accounting cycle stepsnper function excelwhat is a accrued expensefob buyerbalance sheet projections exampleeffective interest rate method of amortizationannuity excelexcell pmthow to treat provision for doubtful debts9 steps in accounting cyclenotes receivable balance sheetdegree of total leverage calculatorgearing leveragedouble entry accounting for dummiesjurnal inventorysuspense in accountingaccount payable normal balanceformat of voucher for paymentdouble entry bookkeeping examplespost closing entries examplessales tax converter calculatorconsignee accountaccounting entries for accrualscalculate activity based costing exampleexamples of prepaid expenses in accountingbond discount amortization schedulegross margin per unit formuladu pont ratiospmt function in excelhow to record prepaid rent journal entrydepreciation using the declining balance methodrule of 78 loan calculatorasset normal balanceperpetuity formula present valuehow to calculate ending work in process inventoryprepaid expenses balance sheetusing pmt in excellifo calculation formulastock turnover perioddouble entry for fixed assetsaccounting principle of conservatismfree bank reconciliation templatesample accounting spreadsheets for excelgearing in accountingtrade receivables formulaexample of prepaid expensesannuity calreceive cash on account journal entryaccounts receivable dsorental ledger samplewhat is meant by payback periodpayroll tax accounting entriesunamortized discount on bonds payablejournal entry for prepaid rent receivedterm loan double entryincome statement vertical analysisaccrued income entrybookkeeping manual pdffreight journal entryjournal entry for cash received in advancestock turnover ratio formulainstallment calculation formulabeginning retained earnings formulaexcess and obsolete inventoryjob costing template freeallowance method accountingfactoring accounts receivable journal entries