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24 September, 15:28

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

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  1. 24 September, 15:43
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    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
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