Purchasing merchandise inventory on account results in an accounts receivable.

Name: Purchasing merchandise inventory on account results in an accounts receivable.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Purchasing merchandise inventory on account results in an increase in accounts payable, not accounts receivable. Accounts receivable is the amount a company expects to receive from their customers for goods or services already provided, not the amount the company owes to their suppliers for inventory purchased on credit.

Purchasing Merchandise Inventory on Account Results in an Accounts Receivable