Cash Purchases

Cash purchases are normally handled in one of three ways:

Petty Cash Purchases

When a purchase is made using petty cash, the expense/asset account(s) corresponding to the item(s) purchased are debited, and the petty cash account is credited.

Bank Check Purchases

When a purchase is made by issuing a check to a vendor when there is no accounts payable account, the expense/asset account(s) corresponding to the item(s) purchased are debited, and the bank account on which the check is drawn is credited.


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