Use the information given above to answer the following questions:
Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first 3 months of business.

-What does transaction (2)represent?
A) sale of inventory on credit
B) sale of inventory for cash
C) purchase of inventory on credit
D) purchase of inventory for cash.

Question

Use the information given above to answer the following questions:
Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first 3 months of business.

-What does transaction (2)represent?
A) sale of inventory on credit 
B) sale of inventory for cash 
C) purchase of inventory on credit 
D) purchase of inventory for cash.

Quizplus · Accepted Answer

Transaction (2) shows an increase in Accounts Receivable and a decrease in Sales Revenue, indicating a sale on credit.

Use the Information Given Above to Answer the Following Questions