A Firm Uses the Perpetual Inventory Method

Multiple Choice

A firm uses the perpetual inventory method. Which of the following entries would be made to record a purchase of inventory on credit?

A) The accounting entry would be a debit to Inventory and GST Clearing and a credit to Accounts payable.
B) The accounting entry would be a debit to Accounts payable and a credit to Purchases and GST Clearing.
C) The accounting entry would be a debit to Accounts payable and GST Clearing and a credit to Inventory.
D) The accounting entry would be a debit to Purchases and GST Clearing and a credit to Accounts payable.