In the perpetual inventory system, no year-end adjusting entry is necessary, as long as the physical inventory agrees with the amount reported in the merchandise inventory account.

Question

Quizplus · Accepted Answer

In a perpetual inventory system, the merchandise inventory account is constantly updated with every purchase and sale, so there is no need for a year-end adjusting entry if the physical inventory matches the balance in the account.

In the Perpetual Inventory System, No Year-End Adjusting Entry Is