Faust Company uses the perpetual inventory system. Faust sold goods that cost $5,600 for $9,200. The sale was made on account. What is the net effect of the sale on the company's financial statements?(Consider the effects of both parts of this event.)

Question

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The sale increases accounts receivable (an asset) by $9,200 and decreases inventory (an asset) by $5,600, resulting in a net increase in total assets of $3,600.

Faust Company Uses the Perpetual Inventory System