Under a perpetual inventory system, the entry to record the cost of goods sold would include a debit to:
A)Cost of Goods Sold and a credit to Inventory for the retail price of the inventory.
B)Inventory and a credit to Sales Revenue for the retail price of the inventory.
C)Cost of Goods Sold and a credit to Inventory for the cost of the inventory.
D)Inventory and a credit to Cost of Goods Sold for the cost of the inventory.

Question

Quizplus · Accepted Answer

Under a perpetual inventory system, the cost of goods sold is recorded by debiting the Cost of Goods Sold account and crediting the Inventory account for the cost of the inventory sold, not the retail price. This reflects the reduction in inventory and recognizes the expense of goods sold.

Under a Perpetual Inventory System, the Entry to Record the Cost