Under the perpetual inventory system, the purchase of inventory affects both an asset and the shareholder's equity account.

Question

Quizplus · Accepted Answer

Under the perpetual inventory system, the purchase of inventory affects an asset account (increasing inventory) and a liability account (if purchased on credit) or cash account (if purchased with cash), but it does not directly affect the shareholder's equity account.

Under the Perpetual Inventory System, the Purchase of Inventory Affects