What is the correct journal entry to record equipment purchased on account?

• A. Debit Equipment; Credit Accounts Payable
• B. Debit Accounts Payable; Credit Equipment
• C. Debit Cash; Credit Equipment
• D. Debit Inventory; Credit Accounts Payable

Answer: (A)

When you buy equipment on account, you’re increasing an asset and creating a liability—the purchase is not paid with cash yet. Debiting the Equipment account shows the asset going up, and credit-ing Accounts Payable records the obligation to pay in the future.

So the correct entry is: Debit Equipment; Credit Accounts Payable. This keeps the accounting equation balanced: assets rise, and liabilities rise by the same amount.

If you had paid cash instead, you’d debit Equipment and credit Cash. If you bought inventory instead of equipment, you’d debit Inventory. Debiting Accounts Payable would be appropriate only when paying off the liability, not when recording the purchase.