When merchandise is acquired on account and the perpetual system of inventory is used, the journal entry for the purchase would include

Question

Quizplus · Accepted Answer

When merchandise is acquired on account and the perpetual system of inventory is used, the journal entry for the purchase would include debiting Merchandise Inventory and crediting Accounts Payable. This is because under perpetual accounting, merchandise inventory is credited when sold and debited when purchased, while accounts payable is credited when purchased and debited when paid. Therefore, when merchandise is acquired on account, it is recorded by debiting merchandise inventory and crediting accounts payable.

When Merchandise Is Acquired on Account and the Perpetual System