When a company purchases inventory (merchandise purchased in order to be resold) what will happen to its Cash account?

Purchases of inventory can be done by cash payment or on credit basis, if the purchase is done with the intention of enjoying credit terms then cash will not be affected as the cost of the inventory will be treated as liability (payable).

On the other hand if payment was made for the purchase of the inventory then cash will reduce with the cost of the inventory whereas inventory will increase.

The cash account decreases...