Account Debited for Merchandise Inventory Purchases

Explanation

The perpetual inventory system records purchases of merchandise inventory directly into a balance sheet account called Merchandise Inventory.

When merchandise inventory is purchased under a perpetual system, the account that is debited depends on the specific transaction being recorded. However, in this question, we need to determine the account that is typically debited when merchandise inventory is purchased.

In a perpetual inventory system, every transaction related to merchandise inventory is recorded in real-time, meaning that inventory balances are continuously updated. When merchandise inventory is purchased, the following accounts are involved:

1. Merchandise Inventory: This account represents the value of the inventory held by the company. It is an asset account and is typically debited when inventory is purchased. Increasing the merchandise inventory account reflects the company's ownership of additional inventory.

2. Accounts Payable: This account represents the amount the company owes to its suppliers for the purchased inventory. It is a liability account. When merchandise is purchased on credit, meaning the payment is not made immediately, the accounts payable account is credited. This reflects the company's obligation to pay the supplier in the future.

3. Cash: This account represents the actual cash held by the company. If the merchandise inventory is purchased using cash, the cash account is debited. However, in this question, it specifies the case under a perpetual system, so cash is less likely to be the correct answer, as it is not the typical account debited under this system for inventory purchases.

4. Purchases: This account represents the total cost of inventory purchased during a given period. It is an expense account used to record the cost of inventory acquired. In some accounting systems, the purchases account is debited when inventory is purchased. However, in this question, it specifies the perpetual system, where each inventory transaction is recorded individually, so the purchases account is not typically debited directly for individual inventory purchases.

Considering the options provided, the correct answer is B. Merchandise Inventory. Under a perpetual system, when merchandise inventory is purchased, the Merchandise Inventory account is debited to increase the inventory value and reflect the ownership of the newly acquired goods.

Therefore, the correct answer is B. Merchandise Inventory.