Asked by Dinesh Sivanesan on May 21, 2024
Verified
Purchases of merchandise are typically credited to the merchandise inventory account under the perpetual inventory system.
Merchandise Inventory
Goods that a company holds with the intent to sell them as part of its primary operations.
Perpetual Inventory System
A method of inventory management where records are updated in real-time with every sale and restocking.
- Learn about the influence of the perpetual inventory system on financial transactions and documentation.
Verified Answer
NH
Nickia HughesMay 26, 2024
Final Answer :
False
Explanation :
Under the perpetual inventory system, purchases of merchandise are typically debited to the Merchandise Inventory account, not credited. This increases the inventory balance to reflect the addition of new stock.
Learning Objectives
- Learn about the influence of the perpetual inventory system on financial transactions and documentation.
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