Bally Boutique uses a perpetual inventory system when recording its purchases and sales of inventory.The business sells $6,000 of goods to charge account customers and the goods originally cost Bally,$3000.The entry to record the sale would include:
A) a debit to Cost of Goods Sold for $3,000 and a credit to Merchandise Inventory for $3,000
B) a debit to Merchandise Inventory for $3,000 and a credit to Cost of Goods Sold for $3,000
C) a debit to Sales for $6,000 and a credit to Merchandise Inventory for $6,000
D) a debit to Accounts Receivable for $3,000 and a credit to Sales for $3,000

Question

Quizplus · Accepted Answer

In a perpetual inventory system, the cost of goods sold is recorded at the time of sale. Therefore, you debit Cost of Goods Sold and credit Merchandise Inventory for the cost of the goods sold.

Bally Boutique Uses a Perpetual Inventory System When Recording Its