Question

The journal entry to record the receipt of inventory purchased for cash in a perpetual inventory system would be a. Jan. 1 Merchandise Inventory Cash b. Jan. 1 Office Supplies Cash c. Jan. 1 Purchases Accounts Payable d. Jan. 1 Cash Accounts Receivable 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500

Answer 1

Answer:

The correct answer is a) a. Jan. 1  Merchandise Inventory    1,500 to Cash                                       1,500

Explanation:

In perpatual inventory system complete and detail data relating to inventory is maintained. Seperate accounts of inventory are maintained in company books of account. Inventory purchase is entered in stock account and complete record in books of account is kept related to inventory sales and purchase. For this purpose couple of ledgers are maintained in books of account.

So the company will record purchase as increase in inventory stock and will pass accounting entry given in option 1.