Question

Credit purchase of machine is entered in purchase journal.

• A. True
• B. False

Answer 1

The correct option is B False

Accounting and journal entry for credit purchase includes two accounts, Creditor and Purchase.

In case of a journal entry for cash purchase, Cash account and Purchase account are used.

The person to whom the money is owed is called a “Creditor” and the amount owed is a current liability for the company.