In a perpetual inventory system
A) The sales journal tracks sales discounts taken
B) The cash receipts journal tracks sales returns and allowances taken
C) The cash disbursements journal tracks purchase discounts taken
D) The purchase journal tracks merchandise inventory bought
E) The sales journal tracks increase in inventory

Question

Quizplus · Accepted Answer

In a perpetual inventory system, the purchase journal tracks merchandise inventory bought as it constantly updates the inventory account with every purchase transaction. The sales journal and cash receipts journal track sales revenue and cash receipts, respectively, but do not directly track inventory changes. The cash disbursements journal tracks cash payments made by the company, but not necessarily purchase discounts taken. The sales journal also does not track increases in inventory, as it typically only records the sale of inventory.

In a Perpetual Inventory System