When using a perpetual inventory system,
A) no Purchases account is used.
B) a Cost of Goods Sold account is used.
C) two entries are required to record a sale.
D) All of these answer choices are correct.

Question

Quizplus · Accepted Answer

When using a perpetual inventory system, a Purchases account is not used because inventory is constantly tracked and recorded. Instead, the Cost of Goods Sold account is used to record the cost of goods that have been sold. Two entries are required to record a sale: one to reduce inventory and the other to record the cost of goods sold. Therefore, all of the answer choices are correct.

When Using a Perpetual Inventory System