If a company that uses a perpetual inventory system sold inventory which cost $1,000 for a selling price of $3,000,the accounting equation would show a net:
A)increase in assets and net increase in stockholders' equity.
B)increase in assets and net decrease in liabilities.
C)decrease in assets and net increase in liabilities.
D)decrease in assets and net decrease in stockholders' equity.

Question

Quizplus · Accepted Answer

Net assets would increase by $2,000 because Accounts Receivable increases by $3,000 and Inventory decreases by $1,000.Sales Revenue increases by $3,000,which increases stockholders' equity by $3,000,and Cost of Goods Sold increases by $1,000,which decreases stockholders' equity by $1,000.As a result,stockholders' equity would increase by $2,000.

If a Company That Uses a Perpetual Inventory System Sold