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Question 142.5 pts Using the perpetual inventory system, the purchase of merchandise on account would include...

Question 142.5 pts
Using the perpetual inventory system, the purchase of merchandise on account would include a:
debit to Accounts Payable and a credit to Merchandise Inventory.
debit to Sales and a credit to Accounts Receivable.
debit to Merchandise Inventory and a credit to Accounts Payable.
debit to Merchandise Inventory and a credit to Sales.
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Question 152.5 pts
The return of merchandise to the supplier for credit using the perpetual inventory system would include a:
debit to Accounts Receivable and a credit to Accounts Payable.
debit to Sales Returns and Allowances and a credit to Merchandise Inventory.
debit to Accounts Payable and a credit to Purchases Returns and Allowances.
debit to Accounts Payable and a credit to Merchandise Inventory.
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Question 162.5 pts
The recording of the cost of freight-in under the perpetual inventory system would include a:
debit to Freight-In.
credit to Freight-In.
debit to Merchandise Inventory.
credit to Merchandise Inventory.


Question 19 2.5 pts
When using a perpetual inventory method, what account(s) must be updated when a sale is recognized?
Merchandise Inventory
Cost of Goods Sold
Both A and C are correct.
Supplies

Homework Answers

Answer #1
  • When using Perpetual method:

--All transactions related to Purchase , Purchase return and allowances, Freight In, Purchase Discount are adjusted through “Merchandise Inventory” Account.

--When Sales are made, Cost of Goods sold is adjusted after every sales transaction, along with Merchandise Inventory.

--Based on Above, following questions are answered.

  • Question 14

Correct Answer: Option #3: debit to Merchandise Inventory and a credit to Accounts Payable.

  • Question 15

Correct Answer: Option #4: debit to Accounts Payable and a credit to Merchandise Inventory.

  • Question 16

Correct Answer: Option #3: debit to Merchandise Inventory

  • Question 19

Correct Answer: Option #3: Both A and C are Correct = Both Merchandising Inventory and Cost of Goods Sold gets affected.

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