Under a perpetual inventory system acquisition of merchandise for resale is debited to the
A) Inventory account.
B) Purchases account.
C) Supplies account.
D) Cost of Goods Sold account.

Question

Quizplus · Accepted Answer

Under perpetual inventory system, the acquisition of merchandise for resale is debited to the Inventory account. This account is continuously updated for every purchase and sale, making it easy to track the quantity and value of inventory on hand at any given time. The Purchases account is used under periodic inventory system to record the purchases made during an accounting period, and Cost of Goods Sold account is used to record the cost of merchandise sold during that period. The Supplies account is used to record the cost of supplies used in the business operations.

Under a Perpetual Inventory System Acquisition of Merchandise for Resale