A company that makes the following journal entry at the time of purchasing inventory is using which of the following inventory systems? Dr. Inventory $\quad \mathrm { xxx }$
Cr. Accounts Payable $\quad \mathrm { xxx }$
A)Periodic system
B)Perpetual system
C)Just-in-time system
D)Specific identification system

Question

A company that makes the following journal entry at the time of purchasing inventory is using which of the following inventory systems? Dr. Inventory $\quad \mathrm { xxx }$ 
Cr. Accounts Payable $\quad \mathrm { xxx }$
A)Periodic system
B)Perpetual system
C)Just-in-time system
D)Specific identification system

Quizplus · Accepted Answer

The journal entry directly records the purchase of inventory to the Inventory account, which is characteristic of the perpetual inventory system. This system continuously updates inventory and cost of goods sold records after each transaction.

A Company That Makes the Following Journal Entry at the Time