When Purchasing Inventory on Account in a Perpetual Inventory System

question 53

Multiple Choice

When purchasing inventory on account in a perpetual inventory system, which of the following is TRUE?

• A)The journal entry would be exactly the same for all inventory costing methods.
• B)LIFO and FIFO inventory valuation methods require a debit to inventory while all others require a debit to purchases.
• C)GAAP does not allow inventory to be purchased on account.
• D)The average costing method requires a credit to inventory.

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