Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 6 - No. 12)
5. A purchase of inventory on credit will lead to which of the following?
An increase in cash and a decrease in inventory
An increase in inventory and an increase in accounts payable.
A decrease in inventory and a decrease in accounts payable.
A decrease in cash and a decrease in accounts payable.
Explanation
Purchasing inventory on credit means the company has increased their inventory and also the amount that is owed.
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