If a firm purchases $1,000 of inventory on credit, this should have th
If a firm purchases $1,000 of inventory on credit, this should have the following change on the balance sheet:
A) a $1,000 decrease in inventory and a $1,000 increase in retained earnings.
B) a $1,000 increase in inventory and a $1,000 decrease in cash.
C) a $1,000 increase in inventory and a $1,000 increase in accounts payable.
D) a $1,000 increase in inventory and a $1,000 increase in equity.
ANSWER
C
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