A company that uses the perpetual inventory system sold $1,000 of goods to a customer on account.The inventory had been purchased by the company for $400.Which of the following journal entries correctly records the Cost of goods sold?

Question

Quizplus · Accepted Answer

Option C is correct because it accurately reflects the decrease in inventory and records the cost of goods sold. In a perpetual inventory system, when goods are sold, the cost of the goods sold is debited to the Cost of Goods Sold account and credited to the Inventory account to reflect the reduction in inventory.

A Company That Uses the Perpetual Inventory System Sold $1,000 Cost of goods sold 400 Sales revenue 400\begin{array} { | l | r | r | } \hline \text { Cost of goods sold } & 400 & \\\hline \text { Sales revenue } & & 400 \\\hline\end{array} Cost of goods sold Sales revenue ​400​400​​

A Company That Uses the Perpetual Inventory System Sold $1,000 $\begin{array} { | l | r | r | } \hline \text { Cost of goods sold } & 400 & \\\hline \text { Sales revenue } & & 400 \\\hline\end{array}$