Question

A furniture store acquires a set of chairs for $750 cash and sells them for $1000 cash. These transactions are most likely to affect which accounts?

Answer 1

The transactions affect the inventory and cash accounts when chairs are acquired, and cash and revenue accounts when they are sold.

Step-by-step explanation:

The transactions mentioned in the question most likely affect the accounts of inventory and cash for the purchase, and cash and revenue for the sale. When the furniture store acquires the set of chairs for $750, it increases inventory and decreases cash, which affects the inventory account and the cash account respectively. Similarly, when the chairs are sold for $1000, this transaction increases cash and records revenue, therefore affecting the cash account and the revenue account.