National Instruments Accounts Manager Interview Questions and Answers

The journal entry for cash purchase of goods involves debiting the Purchases account and crediting the Cash account.

• Debit the Purchases account to record the increase in inventory.

• Credit the Cash account to record the decrease in cash.

• The journal entry is: Purchases (debit) and Cash (credit).

The journal entry for purchasing goods on credit involves debiting the inventory account and crediting the accounts payable account.

• Debit the inventory account for the cost of the goods purchased

• Credit the accounts payable account for the same amount

• Example: Debit Inventory for $1,000 and Credit Accounts Payable for $1,000

• This entry reflects an increase in inventory and a liability to pay for the goods purchased