Jenny bought merchandise for her retail business on credit and sold some of it for cash.To record her purchases on her cash flow statement, Jenny will:

Question

Quizplus · Accepted Answer

To record purchases on a cash flow statement, we need to consider the increase in inventory and the increase in trade and other payables. Since Jenny bought merchandise on credit, her trade and other payables would increase. Therefore, we need to subtract the increase in inventory from the increase in trade and other payables to accurately record her purchases on the cash flow statement.

Jenny Bought Merchandise for Her Retail Business on Credit and Sold