Under a Perpetual Inventory System, Acquisition of Merchandise for Resale

question 45

Multiple Choice

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

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

---

Definitions:

Utility Function

A mathematical representation of how different quantities of goods or services generate levels of happiness or satisfaction to the consumer.

Consumption

This term implies the act of using up resources or services to satisfy human wants, often measured to assess the economic activity within a country.

Grocery Store

A retail store that primarily sells food, both fresh and packaged, as well as various household goods.

Utility Function

A mathematical representation of how consumers rank different bundles of goods based on the level of satisfaction (utility) obtained from them.