When the perpetual inventory system is used, the inventory sold is shown on the income statement as

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Quizplus · Accepted Answer

When the perpetual inventory system is used, the cost of merchandise sold is recorded as the items are sold, and therefore, is the correct option to show on the income statement. Purchases, purchases returns and allowances, and net purchases are all part of the calculation of cost of merchandise sold, but are not directly shown on the income statement.

When the Perpetual Inventory System Is Used, the Inventory Sold