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Washington Warehouse is a small retail business that specializes in the sale of top-of-the-line televisions.This year,the store has begun to carry the Flat TV manufactured by Bass Co.Thus far,Washington has recorded the following transactions involving the Flat TV:

-If Washington uses a perpetual inventory system,the journal entry to record the sale on February 12th would include all of the following except:
A)A debit to the Cost of Goods Sold for $12,600.
B)A credit to Sales Revenue for $15,300.
C)A credit to Purchases for $15,300.
D)A credit to Inventory for $15,300.

Question

[The following information applies to the questions displayed below.]
Washington Warehouse is a small retail business that specializes in the sale of top-of-the-line televisions.This year,the store has begun to carry the Flat TV manufactured by Bass Co.Thus far,Washington has recorded the following transactions involving the Flat TV:
 
-If Washington uses a perpetual inventory system,the journal entry to record the sale on February 12th would include all of the following except:
A)A debit to the Cost of Goods Sold for $12,600. 
B)A credit to Sales Revenue for $15,300. 
C)A credit to Purchases for $15,300. 
D)A credit to Inventory for $15,300.

Quizplus · Accepted Answer

A perpetual inventory system updates the inventory account after each sale or purchase. Thus, the journal entry for the sale on February 12th would include a debit to Cost of Goods Sold for $12,600, a credit to Sales Revenue for $15,300, and a credit to Inventory for $12,600 to reduce inventory. There would be no credit to Purchases, as this account is used to record the cost of goods acquired, not sold.

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