If a Company Were Using a Perpetual Inventory System, Which $\begin{array}{|c|c|c|}\hline \text { Dr. Inventory } & 20,000 & \\\hline \text { Cr. Accounts payable } & & 20,000 \\\hline\end{array}$

question 33

Multiple Choice

If a company were using a perpetual inventory system, which of the following entries is the correct journal entry to record the purchase of $20,000 of merchandise on account?
a)
$\begin{array}{|c|c|c|}\hline \text { Dr. Inventory } & 20,000 & \\\hline \text { Cr. Accounts payable } & & 20,000 \\\hline\end{array}$

b)
$\begin{array}{|c|c|c|}\hline \text { Dr. Inventory } & 20,000 & \\\hline \text { Cr. Purchases } & & 20,000 \\\hline\end{array}$

d)
$\begin{array}{|c|c|c|}\hline \text { Dr. Purchases } & 20,000 & \\\hline \text { Cr. Inventory } & & 20,000 \\\hline\end{array}$

d)
$\begin{array}{|c|c|c|}\hline \text { Dr. Purchases } & 20,000 & \\\hline \text { Cr. Accounts payable } & & 20,00 \\\hline\end{array}$

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D

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Definitions:

Fixed Manufacturing Cost Per Unit

The portion of total fixed manufacturing costs allocated to each unit of product, which remains constant on a per unit basis regardless of production volume.

Relevant Range

The range of activity within which the assumptions about fixed and variable costs are valid for the purposes of cost analysis and budgeting.

Conversion Costs

The sum of labor and overhead expenses required to convert raw materials into finished goods.

Incurred Costs

are expenses that a company has realized or recognized, typically associated with the production of goods or services.