A company sold merchandise worth $221 for $350 on account. The seller uses the perpetual inventory system. The entry to record the cost of merchandise sold would include:

Question

Quizplus · Accepted Answer

To record the cost of merchandise sold using the perpetual inventory system, a debit should be made to the Cost of Goods Sold account and a credit to the Merchandise Inventory account. The amount recorded should be the cost of the merchandise sold, which is $221 in this case. Therefore, option C is the correct choice. Option A and B are incorrect because they do not reflect the cost of goods sold, and option D is incorrect because it credits the cost of goods sold account instead of debiting it.

A Company Sold Merchandise Worth $221 for $350 on Account