Question
TK Trading purchased inventory on credit from the supplier. How will record this transaction on the accounting equation.(2)
A.
Increase assets and increase in liabilities
B.
Increase in assets and decrease in equity
C.
Increase in assets and increase in equity
D.
Increase in equity and decrease in assets
A.
Increase assets and increase in liabilities
B.
Increase in assets and decrease in equity
C.
Increase in assets and increase in equity
D.
Increase in equity and decrease in assets
Answers
GPT-4o mini
The correct choice for recording the purchase of inventory on credit is:
**A. Increase assets and increase in liabilities.**
When TK Trading purchases inventory, it increases its assets (inventory) and also incurs a liability because it owes money to the supplier.
**A. Increase assets and increase in liabilities.**
When TK Trading purchases inventory, it increases its assets (inventory) and also incurs a liability because it owes money to the supplier.