Michelin Jewelers uses the perpetual inventory system. On April 2, Michelin sold merchandise with a cost of $5,500 for $9,000 to a customer on account with terms of 3/15, n/30. The journal entry to record the cost of goods sold would be:

Question

Quizplus · Accepted Answer

The perpetual inventory system updates inventory balances continuously, and the cost of goods sold is recorded at the time of sale. Therefore, the journal entry to record the cost of goods sold would be a credit to inventory and a debit to cost of goods sold in the amount of $5,500. Option C shows the correct debit to cost of goods sold and the credit to inventory.

Michelin Jewelers Uses the Perpetual Inventory System B) Sales Revenue 5,500 Cost of Goods Sold 5,500\begin{array} { | c | r | r | } \hline \text { Sales Revenue } & 5,500 & \\\hline \text { Cost of Goods Sold } & & 5,500 \\\hline\end{array} Sales Revenue Cost of Goods Sold ​5,500​5,500​​

Michelin Jewelers Uses the Perpetual Inventory System B) $\begin{array} { | c | r | r | } \hline \text { Sales Revenue } & 5,500 & \\\hline \text { Cost of Goods Sold } & & 5,500 \\\hline\end{array}$