The Garden Spot purchased inventory for $9,000 and will pay the $9,000 next month. What is the journal entry for the purchase?
…Accounts Payable (L) (inc) $9,000
Inventory (A) (inc) $9,000
…Cash (A) (dec) $9,000
Inventory (A) (dec) $9,000
…Accounts Payable (L) (dec) $9,000
Accounts Payable (L) (inc) $9,000
…Inventory (A) (inc) $9,000
Correct answer. The increase in Inventory, an Asset account, should be debited on the left side. The obligation to pay leads to an increase in Accounts Payable, a Liability account, and the increase of liabilities should be credited on the right side with the appropriate dollar amount.
