A supplier sold inventory to Bikes & Autos Pty Ltd valued at $9000.Bikes & Autos Pty Ltd paid half in cash and received 30 days credit for the balance owing.The debit and credit entries for Bikes & Autos Pty Ltd are:

Question

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Bikes & Autos Pty Ltd would debit inventory for the total value of the inventory received ($9000) because this increases their assets. They would credit accounts payable for the half not paid immediately ($4500) because this increases their liabilities, and credit cash for the half that was paid immediately ($4500) because this decreases their asset (cash).

A Supplier Sold Inventory to Bikes & Autos Pty Ltd