If a company buys inventory on account:
A)cash would decrease.
B)accounts payable would increase.
C)net income would increase.
D)common stock would decrease.

Question

Quizplus · Accepted Answer

When a company buys inventory on account, it means that they are purchasing the inventory and have not yet paid for it. Therefore, accounts payable, which is the amount owed to the vendor, would increase until it is eventually paid off. Cash would not decrease immediately, as payment has not yet been made. Net income and common stock would also not be affected by this transaction.

If a Company Buys Inventory on Account