
(a)
Perpetual Inventory System: Perpetual Inventory System refers to the inventory system that maintains the detailed records of every inventory transactions related to purchases and sales on a continuous basis. It shows the exact on-hand-inventory at any point of time.
Accounting rules for journal entries:
- a) To Increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
- b) To Decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.
To Record: Journal entries in the books of T Company.
(b)
To Record: Journal entries in the books of E Company.

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Chapter 5 Solutions
FINANCIAL&MNGRL ACCT (LL)W//WILEYPLUS>C
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