Merchandise Purchased on Account by a Company Has No Effect

question 131

Multiple Choice

Merchandise purchased on account by a company has no effect on its working capital because:​

• A) ​inventory and accounts payable are increased by the same amount.
• B) ​inventory and accounts receivable are increased by the same amount.
• C) ​cash and inventory are increased by the same amount.
• D) ​cash and inventory are decreased by the same amount.

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Definitions:

Cautious

Characterized by a desire to avoid risks and potential problems, showing carefulness and prudence in actions and decisions.

Externally Oriented

Focusing on the external environment and external stimuli rather than internal thoughts and feelings.

Botswana

A landlocked country located in Southern Africa, known for its diverse ecosystems and wildlife.

Black Male

A man of African descent or who identifies with the Black racial group.