Under A Perpetual Inventory System, Assets Purchased For Resale Are Recorded In Which Of The Following Accounts?
The correct option of this multiple choice question (mcq) is (b), as under Perpetual Inventory System, assets or goods or merchandises purchased from suppliers for cash or on account are considered as the parts of inventory account unlike under periodic inventory system these are recorded separately in the books of accounts (as purchases account) of company’s business. For example, if the company purchased assets of $5,000 from suppliers for cash and decided not to use in the business but to resale these in the market for the purpose of earning revenues for the business. The journal entry to record under perpetual inventory system is shown below: Inventory a/c $5,000 ...