Raw Materials of Inventory Were Purchased on Credit for $350

Multiple Choice

Raw materials of inventory were purchased on credit for $350 000. The company uses the perpetual method. This transaction will:

A) increase assets, liabilities and shareholders' equity.
B) increase assets and liabilities but reduce shareholders' equity.
C) increase liabilities but have no effect on assets or shareholders' equity.
D) increase assets and increase liabilities but have no effect on shareholders' equity.