Explain the reason thank you 46 When using a perpetual inven

Explain the reason, thank you

46. When using a perpetual inventory system, why are discounts credited to Inventory? The discounts are debited to discount expense and thus the credit has to be made to merchandise inventory. The discounts reduce the cost of the inventory. The discounts are a reduction of business expenses. None of these answers choices are correct A) B) C) D)

Solution

46) When using a perpetual inventory system, discounts credited to inventory because the discounts reduce the cost of the inventory

So answer is b) The discounts reduce the cost of the inventory