Part of the journal entry to record the cost of an item for $28 that sold for $40 cash under the perpetual inventory system is:

Question

Quizplus · Accepted Answer

Under the perpetual inventory system, the cost of goods sold is recorded at the time of the sale. Therefore, we need to debit the Cost of Goods Sold account for its actual cost of $28 and credit the Inventory account for the same amount. There is no need to credit the Cash account as it is already recorded in the transaction.

Part of the Journal Entry to Record the Cost of an Item