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:

Trade Deficit

A situation in which a country's imports exceed its exports during a given time period.

Economic Performance

An assessment of an economy's health and efficiency, measured by indicators such as GDP, unemployment rates, and inflation.

Recessions

Phases of brief economic downturns marked by diminished trade and industrial operations, typically characterized by a decrease in Gross Domestic Product (GDP) for two consecutive quarters.

Stock Market Crashed

A sudden and significant decline in the stock market's value, leading to widespread financial loss and often triggering economic uncertainty.