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| Cash Purchase Journal Entry |
When a business makes a cash purchase of goods or services, then it is necessary to maintain the transaction in its accounting records.
Journal Entry for Cash Purchase
Purchase or Asset Account Debit
Cash or Bank Account Credit
- The specific "Expense" or "Asset" account is debited because of recognizes the cost of the purchase.
- The "Cash" or "Bank Account" is credited because of represents the decrease in the company's cash or bank balance.
This above journal entry shows the cash purchase of inventory, and recognizing the cost of the purchase, and reducing the company's cash or bank balance.
