Paying cash to purchase inventory is a an asset source trans

Paying cash to purchase inventory is

a. an asset source transaction.

b. an asset use transaction.

c.an asset exchange transaction.

d. a claims exchange transaction.

Solution

Paying cash To purchase inventory means :

i) Paying cash means cash (assets) decrease

ii) Purchase inventory means inventory (assets) increase

so it means its a assets exchange

so answer is c) an asset exchange transaction.