Using the perpetual inventory system,the purchase of merchandise on account would include a:

Question

Quizplus · Accepted Answer

The perpetual inventory system maintains a continuous record of the inventory levels, including the cost of goods sold and the merchandise inventory balance. When merchandise is purchased on account, the Merchandise Inventory account is debited for the cost of the merchandise, and the Accounts Payable account is credited for the same amount. This reflects an increase in inventory and a liability to be paid in the future. Therefore, option A is the correct choice.

Using the Perpetual Inventory System,the Purchase of Merchandise on Account