A Firm Uses the Perpetual Inventory Method

question 51

Multiple Choice

A firm uses the perpetual inventory method.Which of the following entries would be made to record a purchase of inventory on credit?

• A)The accounting entry would be a debit to Accounts payable and GST clearing and a credit to Inventory.
• B)The accounting entry would be a debit to Accounts payable and a credit to Purchases and GST Clearing.
• C)The accounting entry would be a debit to Purchases and GST clearing and a credit to Accounts payable.
• D)The accounting entry would be a debit to Inventory and GST clearing and a credit to Accounts payable.

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Definitions:

Right Way

The most effective or ethical approach to achieve a goal or solve a problem.

Right Time

The most suitable or appropriate moment to take action or make a decision to ensure the best possible outcome.

Behaviour

The actions, reactions, or conduct of an individual or group in response to external or internal stimuli.

Laws

The system of rules that a particular country or community recognizes as regulating the actions of its members and may enforce by the imposition of penalties.