Abbott Company purchased $6,500 of merchandise inventory on account. Abbott uses the perpetual inventory method. How does this transaction affect the financial statements?

Abbott Company purchased $6,500 of merchandise inventory on account. Abbott uses the perpetual inventory method. How does this transaction affect the financial statements?

Increase cost of goods sold and increase accounts payable.

Increase inventory and increase accounts payable.

Decrease accounts payable and decrease purchases.

Decrease accounts payable and decrease inventory.