Which of the following statements about the perpetual inventory control method is NOT true?
A) When a sale is made, cost of goods sold is increased.
B) When inventory is purchased, it is treated as an expense.
C) When a sale is made, inventory is decreased.
D) An inventory count can reveal inventory losses due to theft.

Question

Quizplus · Accepted Answer

When inventory is purchased, it is not treated as an expense under the perpetual inventory control method. Instead, it is recorded as an asset until it is sold, at which point it becomes cost of goods sold.

Which of the Following Statements About the Perpetual Inventory Control