Under the perpetual inventory system
A)the cost of each item is recorded in the Merchandise Inventory account when it is purchased.
B)when an inventory item is sold,its cost is transaferred to the Cost of Goods Sold account.
C)the balance of the Merchandise Inventory account equals the cost of goods on hand.
D)All of these choices.

Question

Quizplus · Accepted Answer

The perpetual inventory system requires the cost of each item to be recorded in the Merchandise Inventory account at the time of purchase, and when an inventory item is sold, its cost is transferred to the Cost of Goods Sold account. The balance of the Merchandise Inventory account should equal the cost of goods on hand, as it is constantly updated as inventory is purchased and sold. Therefore, all of the choices are correct.

Under the Perpetual Inventory System