The Journal Entry to Record a Purchase of Inventory for Cash

question 31

Multiple Choice

The journal entry to record a purchase of inventory for cash under the perpetual system includes:

• A)a debit to Merchandise Inventory.
• B)a debit to Cash.
• C)a credit to Cash.
• D)Both A and C are correct.

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Definitions:

Bank Officer

An individual who holds a management or executive position within a banking institution, responsible for certain operational aspects.

Stale Check

A check that has not been cashed or deposited within a certain timeframe, typically six months, and may not be honored by a bank.

Overdraft

An extension of credit from a lending institution when an account reaches zero, allowing for a negative balance.

Certified Check

A check verified by a bank, guaranteeing that the signer has sufficient funds in their account to cover the check's amount at the time of certification.