Use the following information for questions

-Assuming Chu uses a perpetual inventory system, the entry to account for the March 1 purchase is
A)Debit: "Inventory" and Credit: "Accounts Payable" $875
B)Debit: "Purchases" and Credit: "Accounts Payable" $875
C)Debit: "Accounts Payable" and Credit: "Purchases" $875
D)Debit: "Accounts Payable" and Credit: "Inventory" $875

Question

Use the following information for questions 
 
-Assuming Chu uses a perpetual inventory system, the entry to account for the March 1 purchase is
A)Debit: "Inventory" and Credit: "Accounts Payable" $875 
B)Debit: "Purchases" and Credit: "Accounts Payable" $875 
C)Debit: "Accounts Payable" and Credit: "Purchases" $875 
D)Debit: "Accounts Payable" and Credit: "Inventory" $875

Quizplus · Accepted Answer

In a perpetual inventory system, inventory is debited when a purchase is made. Therefore, the entry would be Debit: "Inventory" and Credit: "Accounts Payable" $875.

Use the Following Information for Questions