If the perpetual inventory system is used, the merchandise inventory account is debited for purchases of merchandise.

Question

Quizplus · Accepted Answer

In the perpetual inventory system, the merchandise inventory account is debited for purchases of merchandise to reflect the increase in the inventory asset. This is in contrast to the periodic inventory system where the purchases are initially recorded to a purchases account and then transferred to merchandise inventory at the end of the period.

If the Perpetual Inventory System Is Used, the Merchandise Inventory