**Question 7**Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include:- a. credit to Sales- b. debit to Accounts Payable- c. debit to Merchandise Inventory- d. credit to Merchandise Inventory

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Description: **Question 7**Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include:- a. credit to Sales- b. debit to Accounts Payable- c. debit to Merchandise Inventory- d. credit to Merchandise Inv

The correct answer is: (C) Debit to merchandise inventory A perpetual inventory system keeps track of inventory on a real-time basis, so when merchandise is purchased on account, it is immediately reflected in the inventory account.A perpetual inventory system records inventory purchases in the inventory account as soon as the purchase is made. Therefore, when merchandise is purchased on account, there would be a debit to the inventory account and a credit to accounts payable. Therefore, the answer is: (C) Debit to merchandise inventory

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Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a a. credit to Sales b. debit to Accounts Payable O c. debit to Merchandise Inventory O d. credit to Merchandise Inventory

Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a a. credit to Sales b. debit to Accounts Payable O c. debit to Merchandise Inventory O d. credit to Merchandise Inventory

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is

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