Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a

A) debit to Accounts Payable
B) debit to Merchandise Inventory
C) credit to Merchandise Inventory
D) credit to Sales

Question

satya singh · Accepted Answer

Final Answer : B, Explanation :  In a perpetual inventory system, the purchase of merchandise is recorded with a debit to Merchandise Inventory, as it increases the inventory account. Since the purchase is on account, we also need to credit the Accounts Payable account to record the liability. Therefore, the entry to record the purchase of $30,000 of merchandise on account would be: Debit Merchandise Inventory $30,000 and Credit Accounts Payable $30,000. The other options (debit to Accounts Payable, credit to Merchandise Inventory, and credit to Sales) are incorrect as they do not correctly account for the purchase of merchandise on account in a perpetual inventory system.

Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a

A) debit to Accounts Payable
B) debit to Merchandise Inventory
C) credit to Merchandise Inventory
D) credit to Sales

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Learning Objectives

Related questions

Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include aA) debit to Accounts PayableB) debit to Merchandise InventoryC) credit to Merchandise InventoryD) credit to Sales

Definitions

Learning Objectives

Learning Objectives

Related questions

Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a

A) debit to Accounts Payable
B) debit to Merchandise Inventory
C) credit to Merchandise Inventory
D) credit to Sales