Under the Perpetual Inventory System, the Account to Which Purchased

question 121

Multiple Choice

Under the perpetual inventory system, the account to which purchased goods are recorded is:

• A)Purchases as a credit.
• B)Inventory as a debit.
• C)Cost of Goods Sold as a debit.
• D)Purchases as a debit.

---

Definitions:

Partial Equity Method

The partial equity method is an accounting approach used when an investing company has significant influence, but not full control, over an investee, recognizing income to the extent dividends are received.

Goodwill

An intangible asset that arises when a company acquires another business for more than the fair value of its net identifiable assets.

U.S. GAAP

Generally Accepted Accounting Principles in the United States, a set of guidelines and standards for financial reporting and accounting practices to ensure consistency and transparency.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) for the preparation of public company financial statements globally.