Northshore Equipment,Inc.purchases $3,500 of inventory on account from Aspen,Co.The journal entry to record this purchase for Northshore Equipment under a perpetual inventory system is:

Question

Quizplus · Accepted Answer

Under a perpetual inventory system, the journal entry to record a purchase on account includes debiting Inventory and crediting Accounts Payable to the supplier from whom the inventory was purchased. Therefore, the correct option is to debit Inventory and credit Accounts Payable-Aspen. Option D is the only one that correctly records the transaction under a perpetual inventory system.