Which of the following transactions should be debited to the Inventory account?

• A. Sale of finished goods to customers
• B. Purchase of raw materials for cash
• C. Payment of employee salaries
• D. Return of inventory to suppliers

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the Inventory account. The Inventory account is used to record the value of goods that a company holds for sale or production. Transactions that increase the inventory balance are debited to this account, while transactions that decrease it are credited.
2. Step 2: Analyze the transaction 'Sale of finished goods to customers.' When finished goods are sold, inventory decreases, so this transaction would be credited to the Inventory account, not debited.
3. Step 3: Analyze the transaction 'Purchase of raw materials for cash.' When raw materials are purchased, they are added to inventory, increasing its balance. Therefore, this transaction should be debited to the Inventory account.
4. Step 4: Analyze the transaction 'Payment of employee salaries.' Employee salaries are an expense and do not directly affect inventory. This transaction would be recorded in the Salaries Expense account, not the Inventory account.
5. Step 5: Analyze the transaction 'Return of inventory to suppliers.' When inventory is returned to suppliers, it decreases the inventory balance. This transaction would be credited to the Inventory account, not debited.