On July 1 Bentley Books purchased goods with a cost of $500 on account from Aztec Inc.On July 7 Bentley paid the account in full.The combined effect of these two transactions on Bentley's tabular analysis is

Question

Quizplus · Accepted Answer

The purchase of goods on account increases Inventory and increases Accounts Payable. The subsequent payment decreases Cash and decreases Accounts Payable, but there is no effect on the Inventory account since the purchase has already been recorded. Therefore, the correct choice is A.

On July 1 Bentley Books Purchased Goods with a Cost