A company sold merchandise for cash.What is the effect of this sale?
A)increase in revenue,increase in COGS,decrease in inventory
B)increase in revenue,decrease in COGS,increase in inventory
C)increase in revenue,increase in COGS,increase in inventory
D)increase in revenue,decrease in COGS,decrease in inventory

Question

Quizplus · Accepted Answer

When a company sells merchandise for cash, it recognizes an increase in revenue. The cost of the goods sold (COGS) also increases because it represents the cost of the inventory that was sold. Consequently, the inventory decreases because items have been sold and are no longer in stock.

A Company Sold Merchandise for Cash