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The company purchases supplies for $2,500 for cash. The entry will be:Debit Supplies for $2,500Credit Cash for $2,500 True False

Question

The company purchases supplies for $2,500 for cash. The entry will be:

  • Debit Supplies for $2,500
  • Credit Cash for $2,500

True or False?

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Solution

Analysis of the Statement

  1. Understanding the Transaction: The transaction involves purchasing supplies for cash. In accounting, when a company buys supplies, it increases its supplies asset account while decreasing its cash asset account.

  2. Journal Entry Components:

    • Debit: Supplies account is increased by $2,500.
    • Credit: Cash account is decreased by $2,500.

Conclusion

The given entry:

  • Debit Supplies for $2,500
  • Credit Cash for $2,500

is correct.

Final Answer

True

This problem has been solved

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