Under a Perpetual Inventory System, the Entry to Record a Credit

question 77

Multiple Choice

Under a perpetual inventory system, the entry to record a credit purchase of inventory is

• A) debit inventory, credit cash.
• B) debit cash, credit. Inventory.
• C) debit inventory, credit accounts payable.
• D) debit accounts payable, credit inventory.

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Definitions:

Estimated

An approximate calculation or judgment regarding a number, value, or size based on available data, often used in planning and forecasting.

Liabilities

Economic responsibilities or liabilities that a business must pay back to others, requiring the disbursement of economic resources over a period.

Sales Taxes Payable

A liability account that represents the amount of sales tax collected from customers by a business, which is owed to the government.

Current Liability

Financial obligations that a company is required to pay within one year.