The account distribution for purchases of inventory on account is:
A)Debit Checking and Merchandise Inventory;credit Accounts Receivable/customer.
B)Debit Merchandise Inventory and Accounts Receivable;credit Sales.
C)Debit Accounts Receivable/Customer;credit Accounts Payable/vendor.
D)Debit Merchandise Inventory;credit Accounts Payable/vendor.
E)None of these.

Question

Quizplus · Accepted Answer

The correct account distribution for purchases of inventory on account is to debit Merchandise Inventory, which increases the asset account for inventory, and credit Accounts Payable/vendor, which increases the liability account representing the amount owed to the vendor. This reflects the acquisition of inventory on credit terms.

The Account Distribution for Purchases of Inventory on Account Is