What is the journal entry for recording a purchase of inventory on credit for $3

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Question: What is the journal entry for recording a purchase of inventory on credit for $3,000?

Options:

Correct Answer: Debit Inventory $3,000, Credit Accounts Payable $3,000

Solution:

The correct journal entry is to debit Inventory and credit Accounts Payable, reflecting the increase in inventory and the obligation to pay.

What is the journal entry for recording a purchase of inventory on credit for $3,000?

What is the journal entry for recording a purchase of inventory on credit for $3,000?

Step 1: Identify the accounts involved in the transaction. In this case, we have 'Inventory' and 'Accounts Payable'.
Step 2: Determine the amount of the purchase. Here, the amount is $3,000.
Step 3: Decide which account to debit. Since we are increasing our inventory, we will debit the 'Inventory' account.
Step 4: Decide which account to credit. Since we are purchasing on credit, we will credit the 'Accounts Payable' account.
Step 5: Write the journal entry. It will look like this: Debit Inventory $3,000 and Credit Accounts Payable $3,000.

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