Given a perpetual inventory system which one of the following statements is false?
A)Freight costs incurred by the buyer are added to the Inventory account.
B)Purchases of merchandise for sale are recorded in the Inventory account.
C)A discount taken for early payment is credited to the Inventory account.
D)A return of merchandise is credited to the Purchase Returns and Allowances account.

Question

Quizplus · Accepted Answer

Under a perpetual inventory system, returns of merchandise are recorded by crediting the Inventory account directly, not the Purchase Returns and Allowances account. The Purchase Returns and Allowances account is typically used in a periodic inventory system.

Given a Perpetual Inventory System Which One of the Following