The Barkley Company bought supplies in early January that it must pay for by the end of the month. These purchases are posted to accounts payable and listed as assets on the firm's balance sheet.

Question

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When purchases are made on credit (i.e. with the promise to pay later), they are recorded as accounts payable, which is a liability on the balance sheet. Assets are items that the company owns and expects to provide benefits in the future, such as inventory or equipment.

The Barkley Company Bought Supplies in Early January That It