Beta Limited buys £30,000 of inventory on credit terms. What is the correct double entry to reflect this transaction?
A) Increase inventory £30,000, decrease trade payables £30,000
B) Increase inventory £30,000, increase trade payables £30,000
C) Decrease inventory £30,000, decrease trade payables £30,000
D) Decrease inventory £30,000, increase trade payables £30,000

Question

Quizplus · Accepted Answer

When inventory is purchased on credit, inventory increases as an asset and trade payables increase as a liability, both by £30,000.

Beta Limited Buys £30,000 of Inventory on Credit Terms