In a Perpetual Inventory System

question 20

Multiple Choice

In a perpetual inventory system

• A)The sales journal tracks increase in inventory.
• B)The sales journal tracks sales discounts taken.
• C)The cash disbursements journal tracks purchase discounts taken.
• D)The cash receipts journal tracks sales returns and allowances taken.
• E)The purchase journal tracks merchandise inventory bought.

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Definitions:

Transferred

The act of moving assets, funds, or rights from one account, location, or ownership to another.

Journals

Recorded chronological entries that detail all the financial transactions of a business, used as the initial place of record.

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or equity account.

Increase

An upward movement in quantity, value, or some measure of performance.