How are sales revenues recorded under a perpetual inventory system

Asked by admin @ 29/10/2021 in Business viewed by 271 People

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

Answered by admin @ 29/10/2021

Answer:

D) the Merchandise Inventory account is debited for purchases of goods that the company intends to resell to customers

Explanation:

Under the perpetual inventory system, the inventory should be recorded immediately when the inventory is sold or purchased.

At the time of purchase on inventory on account we debited the merchandise inventory and credited the account payable i.e

Merchandise inventory XXXXX

To Account payable XXXXX

(being the inventory is purchased on account)

It increased the inventory and account payable so it is debited and credited respectively

Therefore, the last option is correct

Able, baker, and charles are engaged in the marketing to and enrollment of beneficiaries into medicare health plans. mr. able is an independent agent paid directly by a health plan. ms. baker is an independent agent paid through a field marketing organization (fmo). mr. charles is an independent agent paid for his work by a third-party marketing organization (tmo). how do the cms compensation rules apply to these three agents?

Asked by maham237 @ 13/01/2021 in Business viewed by 2741 persons

How are sales revenues recorded under a perpetual inventory system

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