Returned Merchandise for credit. The perpetual inventory system is in use. This will: A) decrease a liability and decrease an asset B) increase a liability and increase asset C) increase an expense and increase a liability D) decrease an expense and decrease a liability Under the perpetual system, the purchase of merchandise is recorded by a(n): A) increase to Cost of Goods Sold; increase to Accounts Payable B) decrease to Accounts Payable; decrease to Purchases. C) increase to Purchases; increase to Accounts Payable. D) increase to Merchandise Inventory; increase to Accounts Payable The inventory method where the cost flows tend to follow the physical flows is: A) weighted-average B) FIFO C) LIFO D) All of these answers are correct The inventory method that matches old costs with current selling prices is: A) specific invoice B) FIFO C) weighted-average D) LIFO