Which of the following shows the effects of purchasing inventory on account? Balance Sheet Income Statement...

Question

Question

Answer 1

Answer #1

ANSWER = C

ASSETS ( + )

LIABILITIES ( + )

EQUITY (NA)

REV. ( NA)

EXP. ( NA)

NET INC. ( NA)

STATEMENT OF CASH FLOWS ( NA)

HERE journal entry for purchase of inventory

DEBIT INVENTORY

. CREDIT ACCOUNT PAYABLE

Hence inventory is shown in balance sheet as current asset

where as account payable is shown in balance sheet as current

liability.

Answer 2

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