Economics · Double-Entry Bookkeeping
Ali has purchased $2,000 of inventory on credit terms. How will this transaction affect the accounts of Ali's business?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Purchases will increase by $2,000 and trade payables will decrease by $2,000.
- 2Purchases will increase by $2,000 and the bank account will decrease by $2,000.
- 3Trade payables will increase by $2,000 and the bank account will decrease by $2,000.
- 4Trade payables will increase by $2,000 and purchases will increase by $2,000.✓
Correct answer
Trade payables will increase by $2,000 and purchases will increase by $2,000.
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