A company that uses the perpetual inventory system sold goods to a customer for cash for $4,600.The cost of the goods sold was $1,000.Which of the following journal entries correctly records this transaction?

Question

Quizplus · Accepted Answer

In the perpetual inventory system, the cost of the goods sold is immediately recognized as an expense at the time of sale. Therefore, the journal entry should credit Inventory for the cost of the goods sold and debit Cash for the amount received. Choice B correctly records this transaction with a debit to Cash for $4,600 and a credit to Inventory for $1,000.

A Company That Uses the Perpetual Inventory System Sold Goods