The Central Warehouse Internal Service Fund purchased $15,000 of inventory on account, which was unpaid as of the month end. Which of the following statements regarding the accounting for the transaction is false?

Question

Quizplus · Accepted Answer

Purchasing inventory on account increases inventory (an asset) and accounts payable (a liability), but it does not immediately affect expenses. Expenses increase when the inventory is used, not when it is purchased.

The Central Warehouse Internal Service Fund Purchased $15,000 of Inventory