Which of the following business transactions would be posted in a ledger?

• A. Preparing a budget for office supplies
• B. Forecasting future cash flows
• C. Estimating next year's sales revenue
• D. Recording the purchase of inventory on credit

Answer: (D)

Verified step by step guidance

1. Understand the purpose of a ledger: A ledger is a book or digital record where all financial transactions are posted. It is used to track and organize transactions that affect the financial position of a business.
2. Identify the nature of the transactions listed: Preparing a budget, forecasting future cash flows, and estimating sales revenue are planning activities and do not involve actual financial transactions. These activities are not recorded in the ledger.
3. Focus on the transaction involving the purchase of inventory on credit: This transaction directly affects the financial accounts of the business. It impacts both the inventory account (an asset) and the accounts payable account (a liability).
4. Determine how the transaction is recorded: When inventory is purchased on credit, the ledger entry typically involves debiting the inventory account to increase assets and crediting the accounts payable account to reflect the liability.
5. Conclude that only transactions involving actual financial activity, such as recording the purchase of inventory on credit, are posted in the ledger. Planning and forecasting activities are not posted in the ledger as they do not represent actual financial transactions.