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

Question

Quizplus · Accepted Answer

In a perpetual inventory system, the purchase journal tracks merchandise inventory bought as the system requires the constant updating of inventory balance with every purchase made. The sales journal tracks the sales made, but not the increase in inventory. The cash disbursements journal tracks payments made for purchases, but not purchase discounts taken. The cash receipts journal tracks cash received but not sales returns and allowances taken.

In a Perpetual Inventory System