Find Which of correctly describes effect of transaction

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Problem 1: On April 1, a hardware retailer purchases inventory on account for $1,100. Which of the following correctly describes the effect of this transaction? Assume a perpetual inventory system is used.

a. Merchandise Inventory decreases by $1,100 and Accounts Receivable increases by $1,100.
b. Merchandise Inventory increases by $1,100 and Accounts Payable decreases by $1,100.
c. Merchandise Inventory decreases by $1,100 and Accounts Receivable decreases by $1,100.
d. Merchandise Inventory increases by $1,100 and Accounts Payable increases by $1,100.

Reference no: EM132959148

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