Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 6 - No. 1)
What would be the impact of the purchase of inventory on account?
Increase assets and decrease liabilities.
Increase assets and increase liabilities.
Decrease assets and decrease liabilities.
Decrease assets and increase liabilities.
Explanation
Purchasing inventory on account increases both assets (inventory) and liabilities (accounts payable).
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