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Under the Perpetual Inventory System, What Is the Entry for the Credit

Question 40

Multiple Choice

Under the perpetual inventory system, what is the entry for the credit purchase of 10 electric guitars at $250 per guitar plus GST of $25 each?


A) Debit inventory $2750; credit accounts payable $2500; credit GST outlays $250
B) Debit inventory $2500; debit GST outlays $250; credit accounts payable $2750
C) Debit inventory $2750; credit accounts payable $2750
D) Credit accounts payable $2750; debit inventory $2500; credit GST collections $250

Correct Answer:

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