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under a perpetual inventory system 1. increases in inventory resulting from purchases increase the purchases account...

under a perpetual inventory system
1. increases in inventory resulting from purchases increase the purchases account
2. the account purchase returns and allowances is increased when goods are returned to vendors
3. accoubtong records continually disclose the amount of inventory
4. there os no need for a year end physical count
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Answer #1

Under perpetual Inventory system , all purshase and purchase return transactions are recorded directly in inventory Account. No purshase Account opens under this method . If any sales occurs of inventory ,cost of inventory sold immediately records (credit) to Cost of good sold by which inventory Account get updated with every sales transactions and disclose the inventory remains in hand. There are no need of physical count at end of year because inventory undates with every purchase and sales transactions.

Options ( 3) is correct.

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