When using a perpetual inventory system the purchases account is debited when merchandise is acquired?

When using a perpetual inventory system the purchases account is debited when merchandise is acquired?

In a perpetual inventory system, when merchandise is purchased, it is debited to an account called Purchases. 5. In a periodic inventory system, the Cost of Goods Sold account may be created during the closing process by debiting Cost of Goods Sold and crediting the Beginning Inventory and the Purchases account.

When the perpetual inventory system is used the cost of the inventory sold is debited to?

Under the perpetual system, two sets of entries are made whenever merchandise is sold: (1) the sales amount is debited to Accounts Receivable or Cash and is credited to Sales, and (2) the cost of the merchandise sold is debited to Cost of Goods Sold and is credited to Inventory.

When merchandise purchased on account is returned under the perpetual?

Question: When Merchandise Purchased On Account Is Returned Under The Perpetual Inventory System, The Buyer Would Debit.

What account is closed at the end of the year using the perpetual inventory system?

The Income Summary account is closed to the Retained Earnings account. The effect is to transfer temporary (income statement) account balances in the income summary totalling $4,034 to the permanent (balance sheet) account, Retained Earnings.

What is the journal entry when using a perpetual inventory system?

Under the perpetual inventory method each time there is a movement journals are processed to record the change. Purchases are debited to inventory and sales are credited to inventory, with the debit going to the cost of goods sold account.

What is the major difference between a periodic and perpetual inventory system?

The primary difference between the periodic and perpetual inventory systems is: The perpetual system maintains a continual record of inventory transactions, whereas the periodic system records these transactions only at the end of the period.