Paid cash for supplies journal entry
Overview
In business, the company usually needs to purchase office supplies for the business operation. Likewise, when it paid cash for supplies, it needs to make a proper journal entry, based on whether it is on the purchasing date or it is on a later date for settlement the payable it has made on the purchasing date.
Paid cash for supplies journal entry
The company can make the journal entry for the supplies it paid the cash for by debiting the office supplies account and crediting the cash account.
| Account | Debit | Credit |
|---|---|---|
| Office supplies | 000 | |
| Cash | 000 |
The office supplies account is an asset account, in which its normal balance is on the debit side. The company usually records the office supplies that it paid the cash for as an asset on the balance sheet and only when such supplies are used, does the company record them as the expense on the income statement.
Sometimes, the company may purchase the supplies on the credit, and only later does it pays the cash to settle such credit. In this case, the journal entry for the paid cash is with the debit of accounts payable and the credit of the cash account.
| Account | Debit | Credit |
|---|---|---|
| Accounts payable | 000 | |
| Cash | 000 |
This is the case where the company paid cash to settle the liability that it have made when purchasing the office supplies. Of course, the office supplies would be already debited at the date of the purchase with the credit of accounts payable when the company made a credit purchase.
Paid cash for supplies example
For example, on March 18, 2021, the company ABC purchases $ 1,000 of office supplies by paying with cash immediately.
In this case, the company ABC can make the journal entry for the paid cash for supplies on March 18, 2021, as below:
| Account | Debit | Credit |
|---|---|---|
| Office supplies | 1,000 | |
| Cash | 1,000 |
Example 2
On March 19, 2021, the company ABC make another purchase of supplies amounting to $3,000 on credit. Later, on March 26, 2021, it makes the payments of $3,000 to settle the credit purchase of supplies on March 19, 2021.
In this case, the company ABC would make the journal entry of the purchase of supplies on March 19, 2021, with the debit of office supplies account 3,000 and the credit of accounts payable 3,000.
| Account | Debit | Credit |
|---|---|---|
| Office supplies | 3,000 | |
| Accounts payable | 3,000 |
Later, on March 26, 2021, when the company ABC makes the payments of $3,000 to settle the above credit purchase of supplies, it can make the journal entry as below:
| Account | Debit | Credit |
|---|---|---|
| Accounts payable | 3,000 | |
| Cash | 3,000 |
