The journal entry to record the purchase of inventory on account is:

Question

Quizplus · Accepted Answer

The purchase of inventory is a liability that needs to be recorded. When the inventory is bought on account, it means the payment is due later, so account payable account needs to be credited. Inventory is a current asset, so it needs to be debited. Therefore, the journal entry to record the purchase of inventory on account is: Debit inventory, credit accounts payable.

The Journal Entry to Record the Purchase of Inventory on Account