Question

X-Mart purchased $300 of merchandise and paid immediately. Demonstrate the journal entry to record this transaction, assuming the perpetual inventory system is used. Multiple choice question. Debit Purchases $300; credit Cash $300. Debit Merchandise Inventory $300; credit Cash $300. Debit Merchandise Inventory $300; credit Sales $300. Credit Merchandise Inventory $300; debit Cash $300.

Answer 1

Debit Merchandise Inventory $300; credit Cash $300

Step-by-step explanation:

The journal entry to record the given transaction is shown below:

Merchandise inventory Dr $300

To Cash $300

(being cash paid is recorded)

Here the merchandise inventory is debited as it increased the assets and credited the cash as it decreased the assets