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World of Sound is a small retail business that specializes in the sale of top-of-the-line sound systems.This year,the store has begun to carry the Surround Sound manufactured by Carp Co.Thus far,World of Sound has recorded the following transactions involving the Surround Sound

-If World of Sound uses a perpetual inventory system,the journal entry to record the purchase on May 18th would include which of the following?
A)A debit to the Purchases account for $38,250.
B)A debit to the Cost of Goods Sold for $38,250.
C)A credit to Inventory for $38,250.
D)A debit to Inventory for $38,250.

Question

[The following information applies to the questions displayed below.]
World of Sound is a small retail business that specializes in the sale of top-of-the-line sound systems.This year,the store has begun to carry the Surround Sound manufactured by Carp Co.Thus far,World of Sound has recorded the following transactions involving the Surround Sound
 
-If World of Sound uses a perpetual inventory system,the journal entry to record the purchase on May 18th would include which of the following?
A)A debit to the Purchases account for $38,250. 
B)A debit to the Cost of Goods Sold for $38,250. 
C)A credit to Inventory for $38,250. 
D)A debit to Inventory for $38,250.

Quizplus · Accepted Answer

With a perpetual inventory system, inventory is debited when goods are purchased. Therefore, the journal entry to record the purchase of Surround Sound on May 18th would include a debit to Inventory for $38,250.

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