The Morning Company buys inventory and pays an additional $700 to have those goo

Question

The Morning Company buys inventory and pays an additional $700 to have those goods shipped to its warehouse. How is the journal entry for this $700 cost recorded? a. In both a perpetual and a periodic system, inventory is debited for $700. b. In both a perpetual and a periodic system, purchases of inventory is debited for $700. c. In a perpetual system, inventory is debited for $700; in a periodic system, purchases of inventory is debited for $700. d. In a perpetual system, purchases of inventory is debited for $700; in a periodic system, inventory is debited for $700.

Explanation / Answer

Journal entry :

Perpetual method :

Journal entry :

Periodic method :

c. In a perpetual system, inventory is debited for $700; in a periodic system, purchases of inventory is debited for $700.

date accounts & explanation debit credit Merchandise inventory a/c 700 Account payable a/c 700

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