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QUESTION DETAIL
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A vendor offers to take a share of a company in lieu of taking payment for outstanding invoices. How would this be recorded, and how would the inventory purchased from this vendor be recorded?
ANSWER
The BIDaWIZ Team's Answer:
The partner's capital account would be increased (credited) for the amount of outstanding invoices and accounts payable would be decreased (debited) by that same amount. The inventory account should have already been increased as well as accounts payable when it was originally purchased.
