The journal entry to record the purchase of inventory under the perpetual system includes:

Question

Quizplus · Accepted Answer

Under the perpetual system, inventory is recorded at the time of purchase. The journal entry to record the purchase of inventory includes a debit to Merchandise Inventory and a credit to either Accounts Payable (if purchased on credit) or Cash (if purchased for cash). Option A is incorrect because it records the expense before the sale of inventory. Option C is incorrect because it records a sale, not a purchase. Option D is incorrect because it includes both the correct and incorrect options.

The Journal Entry to Record the Purchase of Inventory Under