Inventory was purchased by a business for $3000;$2000 was paid in cash and the rest was put on account.The journal entry will include:

Question

Quizplus · Accepted Answer

The correct journal entry for the transaction includes a debit to inventory for the total amount of the purchase ($3000) to reflect the increase in inventory. Since $2000 was paid in cash, there would be a credit to cash for $2000 to reflect the decrease in cash. The remaining $1000 that was put on account would be credited to accounts payable, indicating an increase in the liability to pay the supplier in the future. Therefore, the correct choice is a credit to accounts payable of $1000. Choices A, B, and C do not accurately reflect the transaction as described.

Inventory Was Purchased by a Business for $3000;$2000 Was Paid