How to Record Transactions Optimistically in Accounting

When recording a transaction for a purchase of supplies, what should be the correct way to complete the recording?

a. Credit another liability account for $430.

b. Credit the Capital account for $430.

c. Credit an asset account for $430.

d. Debit the Capital account for $430.

Answer:

The correct completion of the transaction recording for a purchase of supplies is to credit an asset account for $430.

Final answer: The correct completion of the transaction recording for a purchase of supplies is to credit an asset account for $430. This corresponds to the cash paid initially, reducing the cash asset account. The correct way to complete the recording of the transaction would be to credit an asset account for $430.

Explanation: In answering the question about how to record a purchase of supplies in accounting, the correct completion of the recording would be to credit an asset account for $430. This is because the initial payment made reduces the cash asset account. The entries would be to debit supplies (an asset account) $1300, credit cash (also an asset account) $430, and credit accounts payable (a liability account) $870. This correctly records the increase in supplies, the decrease in cash, and the increase in liabilities. The correct way to complete the recording of the transaction would be to credit an asset account for $430. The correct option is c. Credit an asset account for $430.