Question

X-Mart purchased $300 of merchandise on account. Demonstrate the journal entry to record this transaction, assuming the perpetual inventory system is used.

Answer 1

Answer:

Debit purchases $300 and credit account payable $300

Explanation:

Answer key

Answer 2

Answer:

See explanation

Explanation:

Since X-Mart company uses perpetual inventory system, the inventory system shows the real-time selling of inventories. Purchasing merchandise on account means no cash has been paid and a liability is existed. To record the transaction, the following journal entry will require in the book of X-Mart-

Debit    Merchandise Inventory    $300

Credit               Accounts payable          $300