World of Sound is a small retail business that specializes in the sale of top-of-the-line sound systems. This year, the store has begun to carry the Surround Sound manufactured by Carp Co. Thus far, World of Sound has recorded the following transactions involving the Surround Sound
5 May Purchased 18 units at a unit cost of $2,400
18 May Purchased 15 additional units at $2,550 each
12 June Sold 19 units to the Davies Theater

-If World of Sound uses a perpetual inventory system, the journal entry to record the purchase on 18th May would include which of the following?

Question

World of Sound is a small retail business that specializes in the sale of top-of-the-line sound systems. This year, the store has begun to carry the Surround Sound manufactured by Carp Co. Thus far, World of Sound has recorded the following transactions involving the Surround Sound
5 May Purchased 18 units at a unit cost of $2,400
18 May Purchased 15 additional units at $2,550 each
12 June Sold 19 units to the Davies Theater

-If World of Sound uses a perpetual inventory system, the journal entry to record the purchase on 18th May would include which of the following?

Quizplus · Accepted Answer

In a perpetual inventory system, inventory is continuously updated as goods are bought or sold. Therefore, the journal entry for the purchase on 18th May would include a debit to Inventory for $38,250 to record the increase in inventory.

World of Sound Is a Small Retail Business That Specializes