Question

Besides cash/accts receivable sale, what other entry does a company record using the perpetual system?

1) Inventory purchase
2) Accounts payable
3) Depreciation expense
4) Accrued expenses

Answer 1

The company records inventory purchase, accounts payable, and accrued expenses using the perpetual system.

Step-by-step explanation:

Using the perpetual system, besides cash/accounts receivable sales, a company records other entries such as:

1. Inventory purchase: When a company purchases inventory, it records a debit to the Inventory account and a credit to the Accounts Payable or Cash account.
2. Accounts payable: When a company purchases inventory on credit, it records a credit to the Accounts Payable account.
3. Accrued expenses: If a company has incurred expenses but hasn't yet paid for them, it records a debit to the appropriate expense account and a credit to the Accrued Expenses account.

Depreciation expense is not recorded under the perpetual system because it's an ongoing expense that is typically recorded periodically.