In a perpetual inventory system, when cash sales are recorded:
A)merchandise inventory decreases and cost of goods sold decreases.
B)sales revenue increases and cash decreases.
C)sales revenue increases and equity decreases.
D)merchandise inventory decreases and equity decreases.

Question

Quizplus · Accepted Answer

In a perpetual inventory system, recording cash sales involves increasing sales revenue and decreasing merchandise inventory, which affects equity.

In a Perpetual Inventory System, When Cash Sales Are Recorded