Using a perpetual inventory system, the entry to record the purchase of merchandise on account involves a:
A)debit to Inventory.
B)debit to Accounts Payable.
C)credit to Inventory.
D)credit to Cash.

Question

Quizplus · Accepted Answer

Under a perpetual inventory system, the purchase of merchandise on account is recorded by debiting Inventory to increase the asset account and crediting Accounts Payable to increase the liability, reflecting the obligation to pay for the merchandise in the future.

Using a Perpetual Inventory System, the Entry to Record the Purchase