BUISENESS MANAGEMENT
MERCHANDISING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cash xxPurchases xx
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Merchandise Inventory xxAccounts Payable xx
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Merchandise Inventory xxCash xx
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Purchases xxAccounts Payable xx
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Detailed explanation-1: -Answer and Explanation: Using a perpetual inventory system, the buyer’s journal entry to record the return of merchandise purchased on account includes a d) credit to inventory. The purchase of the inventory under the perpetual inventory system means that inventory was debited and accounts payable was credited.
Detailed explanation-2: -In a perpetual system, two journal entries are required when a business makes a sale: one to record the sale and one to record the cost of the sale. In the first journal entry, Marcia records the revenue from the sale, or the amount she earned from selling her products.
Detailed explanation-3: -What is the journal entry for purchase of merchandise on account? The journal entry for purchase of merchandise on account is the same as the journal entry for purchase of merchandise for cash, except that the accounts payable account is credited instead of the cash account.
Detailed explanation-4: -Within this system, a company makes no effort to keep detailed inventory records of products on hand; instead, purchases of goods are recorded as a debit to the inventory database.