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    kekebrown's Avatar
    kekebrown Posts: 20, Reputation: 0
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    #1

    Sep 1, 2008, 10:33 PM
    What is the best explanation for this journal entry?
    June 26 Supplies 500

    Accounts Payable 500

    ??

    a. Purchased supplies with cash
    b. Investment of supplies by stockholder
    c. Purchased supplies by stockholder
    d. Paid accounts payable


    I think the answer is C.
    AdamUTsel's Avatar
    AdamUTsel Posts: 100, Reputation: 2
    Junior Member
    		  
    #2

    Sep 3, 2008, 08:47 AM
    Quote Originally Posted by kekebrown
    June 26 Supplies 500

    Accounts Payable 500

    ?????????????????

    a. Purchased supplies with cash
    b. Investment of supplies by stockholder
    c. Purchased supplies by stockholder
    d. Paid accounts payable


    I think the answer is C.

    You are correct. The entry is demostrates a purchase of supplies on credit (account). I'm not sure if your professor is using the term "stockholder" in their answer choices to beef up their answer choices as this scenario is highly unlikely, but nevertheless feasible.
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