Question

A delivery of inventory from a vendor, with whom a credit line is already established, would be initially recorded in which type of accounting record and as part of what transaction cycle?
a. purchases journal; expenditure cycle
b. general journal; expenditure cycle
c. general ledger; expenditure cycle
d. cash disbursements journal; production cycle

Answer 1

Answer:

a. purchases journal; expenditure cycle

Explanation:

When a business recieves inventory from a vendor they already have a credit line with, it will be recorded in the purchases journal. A purchases journal is a prime book of entry or day book which is used to keep track of items that are accounts payable.

The cycle involved in this scenario is the expenditure cycle which involves the activities that a business goes through in the acquisition and payment for goods and services.

The reciept of inventory from the vendor is in the expenditure cycle.