Under a perpetual inventory system, the entry to record a sale on account would include a debit to:
A)Accounts Receivable and a credit to Sales Revenue 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 retail price of the inventory.
D)Accounts Receivable and a credit to Sales Revenue for the cost of the inventory.

Question

Quizplus · Accepted Answer

The entry to record a sale on account under a perpetual inventory system involves debiting Accounts Receivable for the amount the customer owes (the retail price) and crediting Sales Revenue for the same amount, reflecting the revenue earned from the sale.

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