A firm uses the perpetual inventory method.To record a sale of inventory on credit will require an entry to record revenue and an entry to record cost of sales.

Question

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When a sale of inventory is made on credit, the firm will need to record revenue (credit to revenue account) and cost of sales (debit to cost of sales account) in order to update their inventory and financial records accurately using the perpetual inventory method.

A Firm Uses the Perpetual Inventory Method