2 Accounting questions please help?

Question

Please explain what each of these mean

-Purchased supplies on account
-Purchased supplies for cash

Answer 1

Why? It means exactly what is says:

Purchased supplies on account means they purchased supplies on account (usually having a line of credit issued)

Purchased supplied for cash means they paid cash for supplies.

Think about how you can pay for things you buy at the store

You can either pay for it by cash (i.e. money, dollars, coins, etc.) or on account (i.e. having a line of credit issued or charging it to a credit card)

Answer 2

Purchased supplies on Account. It is treated as an Accounts Payable item on the Balance Sheet. In other words it is a liability. The supplies have not been paid for. When a payment is made the Accounts Payable is debited and Cash credited.

Purchased supplies for cash. Cash is immediately credited for the amount. There is no liability recorded on the books.

Answer 3

purchased supplies on account means you purchased something from another company and put it on an account, usually paid in 30 days. Purchased supplies for cash means you paid for the good when you got them. Do you need to know the transaction, how it is debited and credited?

Answer 4

purchased supplies on account - goes under accounts payable (liability) because it has not yet been paid

purchased supplies for cash - decrease cash because it was paid with cash

anymore questions, just email :-)

Answer 5

the difference is that purchasing for cash decreases (credits) an asset (cash), while purchasing on account increases (credits) a liability account (accounts payable)

Answer 6

purchased on account = credit, like a bar tab, to be paid later

purchased with cash (notes and coins)= exactly what it says, bought with cash,on the spot. as in not with plastic or credit(on account)

Answer 7

Please let me know if my logic is right:
1. Purchase on account --> Accounts payable (credit), Asset(Debit)
2. Repayment --> Accounts payable (debit), cash (credit)

only in this case we do not use the expense account, which is a bit weird.

Can you help me out with that

Answer 8

Usually something "on account" is like buying something for credit with a specific business.

Purchasing for "cash" would be buying it straight out.