Asked by LeeAnn Tiffany on May 18, 2024
Verified
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 Inventory
C) credit to Inventory
D) credit to Sales
Perpetual Inventory
A continuous tracking system for inventory that records the sale or purchase of inventory in real-time through the use of computerized systems.
Accounts Payable
Debts of a company reflecting the money owed to lenders or suppliers for products and services acquired on credit.
Inventory
All products and materials that a company holds, aimed at either resale or being incorporated into manufacturing processes.
- Understand the accounting records for purchases and sales transactions within a continuous inventory system.
Verified Answer
TK
Taylor KindleMay 19, 2024
Final Answer :
B
Explanation :
Under a perpetual inventory system, the purchase of inventory on account is recorded by debiting the Inventory account to increase inventory and crediting Accounts Payable to reflect the liability incurred. This reflects the increase in assets (inventory) and the increase in liabilities (accounts payable).
Learning Objectives
- Understand the accounting records for purchases and sales transactions within a continuous inventory system.