If a Company Uses a Perpetual Inventory System When Recording

Multiple Choice

If a company uses a perpetual inventory system when recording its purchases and sales of inventory, the entry to record the freight charges on a purchase of merchandise on account would include:

A) a debit to Merchandise Inventory and a credit to Accounts Payable
B) a debit to Cost of Goods Sold and a credit to Merchandise Inventory
C) a debit to Accounts Payable and a credit to Merchandise Inventory
D) a debit to Merchandise Inventory and a credit to Cost of Goods Sold