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Asked by Naomi Allen on May 21, 2024

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If the perpetual inventory system is used, the merchandise inventory account is debited for purchases of merchandise.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Merchandise Inventory Account

An account that records the value of goods that a retailer, wholesaler, or distributor has available for sale to customers at any given time.

  • Recognize the features and advantages of perpetual and periodic inventory systems.
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Michelle BagleyMay 24, 2024
Final Answer :
True
Explanation :
In the perpetual inventory system, the merchandise inventory account is debited for purchases of merchandise to reflect the increase in the inventory asset. This is in contrast to the periodic inventory system where the purchases are initially recorded to a purchases account and then transferred to merchandise inventory at the end of the period.

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