If a Company Uses a Perpetual Inventory System When Recording

question 17

Multiple Choice

If a company uses a perpetual inventory system when recording its purchases and sales of inventory, the entry to record the freight charges on a purchase of merchandise on account would include:

• A)a debit to Merchandise Inventory and a credit to Accounts Payable
• B)a debit to Cost of Goods Sold and a credit to Merchandise Inventory
• C)a debit to Accounts Payable and a credit to Merchandise Inventory
• D)a debit to Merchandise Inventory and a credit to Cost of Goods Sold

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Definitions:

Satellite Dish

A type of parabolic antenna designed to receive or transmit information by radio waves to or from a communication satellite.

Liability

A legal responsibility or obligation, often involving financial restitution in case of loss or damage.

Undisclosed Principal

A principal whose identity is not revealed by the agent to the third party at the time of entering into a contract with the third party.

Third Party

An individual or entity not directly involved in a contract or transaction but may be affected by its outcome.