Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 22 - No. 1)
If a business buys goods on credit, which two accounts are affected?
Cash and Purchases
Purchases and Trade Payables
Sales and Trade Receivables
Cash and Trade Receivables
Explanation
Buying goods on credit increases purchases (an expense/increase in inventory) and increases trade payables (a liability).
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