Under the perpetual inventory system, discounts taken on an invoice by the buyer would be:
A)debited to Merchandise Inventory.
B)credited to Merchandise Inventory.
C)debited to Cost of goods sold.
D)credited to Cost of goods sold.

Question

Quizplus · Accepted Answer

Under the perpetual inventory system, purchase discounts are credited to Merchandise Inventory, reducing the cost of inventory.

Under the Perpetual Inventory System, Discounts Taken on an Invoice