Under the perpetual inventory method, purchased goods are recorded to the:
a. cost of goods sold account as a debit.
b. purchases account as a debit.
c. purchases account as a credit.
d. inventory account as a debit.
The perpetual and periodic inventory systems are used to report the inventory balance after the purchase and sale take place. The former method continuously updates the inventory, while the latter periodically.
Answer and Explanation: 1
The correct answer is d. inventory account as a debit.
The perpetual inventory system uses the Inventory account to record the purchase of goods. On...
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fromChapter 1 / Lesson 15
Learn about the perpetual inventory system and how it is used. Explore the advantages of perpetual inventory systems and compare perpetual vs. periodic inventory.