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| Purchased Goods on Credit Journal Entry |
When a business purchases goods on a credit basis, Credit means acquiring the goods but does not make immediate payment. then the is company required to maintain the records in its accounting records.
Journal Entry for Purchase on Credit
Purchase or Asset Account Debit
Accounts Payable Account Credit
- The Asset or Goods Purchased account is debited because of recognizes the increase in inventory, which is an asset or purchase.
- The "Accounts Payable" account is credited because of represents the liability created by the credit purchase.
This journal entry reflects the increase in Assets or Purchases and the creation of an accounts payable liability for representing the amount for the goods purchased on credit.
