Identify the journal entry required to correctly record the following transaction. Purchased goods on credit.
A) Dr Inventory
Cr Accounts payable
B) Dr Inventory
Cr Accounts receivable
C) Dr Accounts receivable
Cr Inventory
D) Dr Purchases
Cr Cash at bank

Question

Quizplus · Accepted Answer

When goods are purchased on credit, the inventory account needs to be debited as the business has acquired new stock. The accounts payable account needs to be credited as the business has created a liability to pay for the goods at a later date. Therefore, the correct journal entry is: 
Dr Inventory
Cr Accounts payable

Identify the Journal Entry Required to Correctly Record the Following