The journal entry to record the purchase of $7,400 of inventory on account under the perpetual inventory system is:

Question

Quizplus · Accepted Answer

Under the perpetual inventory system, inventory purchases are recorded directly to the Inventory account. Also, since the purchase was made on credit, the Accounts Payable account is credited. Therefore, the correct journal entry is to debit Inventory for $7,400 and credit Accounts Payable for $7,400. Option A is incorrect because cash wasn't involved, and Option B and D are incorrect because they don't follow the principles of perpetual inventory accounting.

The Journal Entry to Record the Purchase of $7,400 of Inventory