Under accrual accounting how would a company record the purchase of a truck for $500 on their balance sheet, the payable and the actual payment?
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Anonymous
ANSWERS: 1
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Since you mention a payable, I assume this is a financed vehicle. For a financed vehicle, the initial entry would be: Debit Fixed Assets - Vehicles $500 Credit Accounts Payable $500 Until the vehicle is paid off, each payment would be recorded as: Debit Accounts Payable $xx Credit Cash $xx If the vehicle is not financed, the transaction would simply be recorded as: Debit Fixed Assets - Vehicles $500 Credit Cash $500
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