What does the Purchasing and Disbursement Cycle record in the GL?

The Purchasing and Disbursement Cycle primarily records transactions related to the acquisition of goods and services and the payments made to vendors. Therefore, it is directly associated with the recording of any purchases made by the company, which can significantly impact either inventory or fixed asset accounts.

When a business buys inventory, it increases its assets, specifically its inventory account, which is part of the balance sheet. Similarly, if the business purchases fixed assets such as machinery or equipment, those transactions are also documented during this cycle. Therefore, the correct answer focuses on the comprehensive nature of the cycle in managing purchasing activities that result in an increase in either inventory or fixed asset accounts within the general ledger (GL).

Sales transactions, payments to vendors, and employee payroll are recorded through different cycles: the revenue cycle, cash disbursements cycle, and payroll cycle, respectively, and thus, they are not directly part of the Purchasing and Disbursement Cycle.