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? (choose all that apply)

- Inventory

- Current Liabilities

- Total Stockholders

Answer 1

- Inventory

- Current Liabilities

Step-by-step explanation:

The journal to record the given transaction is shown below:

Inventory A/c Dr $50,000

To Accounts payable $50,000

(Being the purchase of inventory is recorded)

Since the inventory is a purchase which increases the inventory so the respective account is debited and the account payable is credited as its increases in current liabilities

So, no impact on total stockholders