What is the effect on the accounting equation when a company buys inventory on credit?
(Select one correct option only)

Question

What is the effect on the accounting equation when a company buys inventory on credit? 
 (Select one correct option only)

Accepted Answer

Assets increase; Liabilities increase

Answer

Equity increases; Liabilities increase

Answer

Assets increase; Liabilities decrease

Answer

Assets decrease; Liabilities increase

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