When purchases of merchandise are made on account with a perpetual inventory system, the transaction is recorded with which entry?

Question

Quizplus · Accepted Answer

When purchases of merchandise are made on account with a perpetual inventory system, the entry recorded is a debit to Inventory and a credit to Accounts Payable. This is because the company receives goods and adds them to their inventory, while also creating a liability to pay for those goods at a later date. Therefore, option B is the correct entry for this transaction.

When Purchases of Merchandise Are Made on Account with a Perpetual