A Firm Uses the Perpetual Inventory Method

question 4

Multiple Choice

A firm uses the perpetual inventory method. Which of the following entries would be made to record a purchase of inventory on credit?

• A)The accounting entry would be a debit to Inventory and GST Clearing and a credit to Accounts payable.
• B)The accounting entry would be a debit to Accounts payable and a credit to Purchases and GST Clearing.
• C)The accounting entry would be a debit to Accounts payable and GST Clearing and a credit to Inventory.
• D)The accounting entry would be a debit to Purchases and GST Clearing and a credit to Accounts payable.