Iowa Cattle Company uses a perpetual inventory system.Iowa purchased cattle from Big D Ranch at a cost of $19,500,payable at time of delivery.The entry to record the delivery would be
A) Purchases ...........................19,500
Accounts Payable ..................19,500
B) Inventory ...........................19,500
Accounts Payable ..................19,500
C) Purchases ...........................19,500
Cash ..............................19,500
D) Inventory ...........................19,500
Cash ..............................19,500

Question

Quizplus · Accepted Answer

In a perpetual inventory system, purchases of inventory are recorded directly in the Inventory account. Since the payment is made at the time of delivery, the entry would debit Inventory and credit Cash.

Iowa Cattle Company Uses a Perpetual Inventory System