How would a purchase $400 of inventory on credit affect the income statement?
A) It would increase liabilities by $400.
B) It would decrease liabilities by $400.
C) It would increase noncash assets by $400.
D) Both A and C
E) None of the above

Question

Quizplus · Accepted Answer

A purchase of inventory on credit affects the balance sheet, not the income statement. It increases liabilities and noncash assets, but does not directly affect income statement accounts like revenue or expenses.

How Would a Purchase $400 of Inventory on Credit Affect