Monday, December 12, 2011

What do you credit and what do you debit when you purchase something?

In accounting when you purchase something what do you credit and what do you debit? Account Payable, Accounts Receivable or Purchases account?|||Accounts payable when you debit something or pay for an item.

accounts receivable when you credit something to your business.

When you get money from someone.

When you receive money

/|||Ok, if you purchase something outright I would say that is under your purchases account. Now if you use credit (pay later/installments) I would say accounts payable. Accounts receivable is when you are owed.|||When you purchase you would debit Purchase Account and credit Accounts Payable or Cash.|||Purchases account

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