Question

A company took delivery of $50,000 of new inventory and agreed to pay cash to the supplier within 30 days.

Which of the following items would be increased by this inventory purchase transaction? (check all that apply)


Total Assets



Cost of Goods Sold



Accounts Payable



Retained Earnings



Accounts Receivable


1 point
3.
Question 3
A company

Answer 1

When a company takes delivery of new inventory and agrees to pay cash within 30 days, the following items would be increased by this inventory purchase transaction:

1. **Total Assets**: The inventory account (an asset) increases by $50,000, which increases total assets.
2. **Accounts Payable**: If the company is paying cash within 30 days, there would be an increase in accounts payable until the cash is paid. (However, since the question notes cash payment within 30 days, this may not be applicable unless it includes a delay in cash payment or is noted at a different stage.)

The items that would not be increased are:
- **Cost of Goods Sold**: This account is affected when the inventory is sold, not when it is purchased.
- **Retained Earnings**: This is affected by revenues and expenses, but will not change with the purchase of inventory directly.
- **Accounts Receivable**: This account increases when sales are made on credit, not when purchasing inventory.

So, the correct answer is: **Total Assets**.