A cash purchase of supplies should be recorded in the:

A cash purchase of supplies should be recorded in the:

A) Cash Receipts journal

B) Purchase journal

C) General journal

D) Cash Payments journal

Answer: D) Cash Payments journal

The correct account to record a cash purchase of supplies is the Cash Payments journal. This specialized journal is meant to document all sales transactions that lead to expense of cash within the business organization. When a firm purchases supplies through cash, the amount of cash reduces, and amount of supplies also increases both are assets. This kind of transactions is well addressed by the Cash Payments journal which offers a calendar record of all the cash disbursements. Journalizing of cash expenses in this method creates better structure and ease of tracking of the cash expenses. It also assist in summarizing cash outflow at regular interval for reporting the same to the stakeholders. Applying the Cash Payments journal to such transactions is correct according to bookkeeping requirements and makes it possible to keep track of all financial activity. As for the Purchase journal, it may seem quite applicable; nevertheless, this kind of journal is generally used for credit sales rather than cash ones.