Final answer:
In a perpetual inventory system, the 'Purchases' account does not exist because inventory balances are updated continuously and the cost of purchased inventory is debited directly to the 'Inventory' account.
Step-by-step explanation:
A perpetual inventory system is a system used to track and record stock levels, in which every purchase and sale of stock is logged automatically and immediately. In this system, every time a transaction takes place, the software records a change in inventory levels in real-time.
The concerns inventory management systems in accounting. In a perpetual inventory system, inventory balances are updated continuously as transactions occur, in contrast to a periodic inventory system where updates are made at the end of an accounting period. Therefore, the account that does not exist in a perpetual inventory system is a. Purchases. This is because in a perpetual inventory system, inventory is debited directly at the time of the purchase, and there is no need to have a separate purchases account, which is used in the periodic inventory system to accumulate cost of inventory purchased during the period.