On July 1 Bentley Books Purchased Goods with a Cost

question 91

Multiple Choice

On July 1 Bentley Books purchased goods with a cost of $500 on account from Aztec Inc.On July 7 Bentley paid the account in full.The combined effect of these two transactions on Bentley's tabular analysis is

• A)Decrease Cash $500 and increase Inventory $500.
• B)Decrease Cash $500 and increase Expenses $500.
• C)Increase Accounts Payable $500 and increases Inventory $500.
• D)Increase Accounts Payable $500 and increases Expenses $500.

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Definitions:

Market Price

The market rate for buying or selling an asset or service at this time.

Common Stock

Equity shares of a corporation, representing ownership interest and giving shareholders voting rights and dividends.

Dividends

Payments made by a corporation to its shareholder members, distributing profits.

Price-Earnings Ratio

A valuation metric for stocks, calculated by dividing the market price per share by the earnings per share, indicating how much investors are willing to pay per dollar of earnings.