Each sales transaction for sellers using a perpetual inventory system involves recognizing revenue and cost of goods sold.

Question

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When using a perpetual inventory system, sellers keep a continuous and updated record of their inventory levels, which allows them to recognize revenue and cost of goods sold at the time of each sale. This is in contrast to periodic inventory systems where revenue and cost of goods sold are only recognized at the end of a certain period based on a physical count of inventory.

Each Sales Transaction for Sellers Using a Perpetual Inventory System