When a Company Uses the Perpetual Inventory System ________

question 71

Multiple Choice

When a company uses the perpetual inventory system ________.

• A) purchases of Office Supplies and Equipment that will be used in the day-to-day operations of the business are recorded as debits to Merchandise Inventory.
• B) the purchase of merchandise inventory on account is recorded as a debit to Accounts Payable and a credit to Merchandise Inventory.
• C) the Merchandise Inventory account is reported as an expense on the income statement.
• D) the Merchandise Inventory account is debited for purchases of goods that the company intends to resell to customers.

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Definitions:

Budgeting

The process of creating a plan to spend your money, allowing an individual or organization to determine in advance whether they can afford the necessary expenditures.

Strategic Plans

Strategic plans are comprehensive outlines detailing an organization's goals, priorities, and actions designed to achieve long-term objectives.

Annual Operating Plans

Detailed plans that outline the goals, strategies, and activities for an organization for the upcoming fiscal year.

Stable Industries

Sectors of the economy known for consistent demand and steady growth, often less affected by economic cycles.