Question

The journal entry for the purchase of inventory on account using the perpetual inventory system is

Date Accounts and Explanation Debit Credit
A. Merchandise Inventory xxx
Accounts Payable xxx
B. Accounts Payable xxx
Merchandise Inventory xxx
C. Merchandise Inventory xxx
Cash xxx
D. Merchandise Inventory xxx
Accounts Receivable xxx

Answer 1

Answer:

D. Merchandise Inventory xxx

Accounts Receivable xxx

Explanation:

The Journal Entry is shown below:-

Merchandise Inventory A/c Dr,         xxx

              To Accounts Payable     xxx

(Being purchase of inventory on account is recorded)

Therefore inventory is purchased so it will increasing assets, it is debited while accounts payable is increasing liabilities so it is credited.