Under a perpetual inventory system, acquisition of merchandise for resale is debited to the

Question

Quizplus · Accepted Answer

Under a perpetual inventory system, the inventory account is constantly updated for every purchase of merchandise for resale. Therefore, acquisition of merchandise for resale is debited to the Inventory account. The Purchases account is used in periodic inventory systems to record the total cost of merchandise purchased during an accounting period. The Supplies account is used to record the cost of supplies used in the business operations. The Cost of Goods Sold account is used to record the cost of merchandise sold during an accounting period.

Under a Perpetual Inventory System, Acquisition of Merchandise for Resale