Answer to Question #191670 in Marketing for tetelo

Question

Which one of the following statements regarding the recording of inventory for the perpetual inventory system is correct?

 A. The effect of a transaction on the accounting equation where inventory is purchased for cash is shown as a decrease in assets and a decrease in equity.

 B. The purchase of inventory is recorded in the inventory account

 C. The cost of sales can only be determined at the end of the financial period after the computerized accounting system has electronically updated the accounting records

D. Under the perpetual inventory system, the cost of sales is only determined at the end of each week

Answer 1

B. The purchase of inventory is recorded in the inventory account