Using a Perpetual Inventory System, the Entry to Record the Purchase

question 163

Multiple Choice

Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a

• A) debit to Accounts Payable
• B) debit to Merchandise Inventory
• C) credit to Merchandise Inventory
• D) credit to Sales

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Definitions:

Profit

The financial gain obtained when the revenue from business activities exceeds the expenses, costs, and taxes involved in maintaining the activity.

Market Share

The percentage of total sales revenue in an industry generated by a particular company.

Efficiency

The ability to accomplish a job with a minimum expenditure of time and resources.

Hydraulic Fracturing

A method used to extract underground resources like oil and natural gas by injecting fluid into the ground at high pressure.