In a perpetual inventory system, the cost of inventory sold is:
A)Debited to accounts receivable.
B)Credited to cost of goods sold.
C)Debited to cost of goods sold.
D)Not recorded at the time.

Question

Quizplus · Accepted Answer

In a perpetual inventory system, each sale is recorded immediately, so the cost of goods sold for each sale is also recorded at the same time. The cost of inventory sold is debited to the cost of goods sold account to reflect the reduction in inventory and the cost of the items sold. Therefore, option C is the correct answer.

In a Perpetual Inventory System, the Cost of Inventory Sold