Under a Perpetual Inventory System Acquisition of Merchandise for Resale

question 110

Multiple Choice

Under a perpetual inventory system acquisition of merchandise for resale is debited to the

• A) Inventory account.
• B) Purchases account.
• C) Supplies account.
• D) Cost of Goods Sold account.

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Definitions:

Cost Of Capital

The cost of funds used for financing a business, expressed as the rate of return that investors expect from the capital invested in the business.

Output Effect

The impact on the overall production or output of a firm or economy resulting from a change in demand or other economic variables.

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods or services, leading consumers to replace more expensive items with cheaper alternatives.

Profit-Maximizing Firm

A company that operates with the primary goal of maximizing its profits by adjusting output and pricing.