When a company uses the perpetual Inventory system On the Merchandise Inventory account is reported as an expense on the income statement OB. the purchase of merchandise Inventory on account is recorded as a dobit to Accounts Payable and a credit to Merchandise Inventory OG the Merchandise inventory account is debited for purchases of goods that the company intends to rosell to customers OD. purchases of Office Supplies and Equipment that wil be used in the day-to-day operations of the business are recorded as debits to Merchandise Inventory g Online es On