A company sold merchandise with a cost of $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

The entry to record the cost of merchandise sold under the perpetual inventory system includes a debit to Cost of Goods Sold and a credit to Merchandise Inventory for the amount of the cost of the merchandise sold, which in this case is $221. This entry reduces the inventory account and increases the cost of goods sold account, reflecting the fact that the inventory was sold at a markup. The other choices are incorrect because they do not account for the cost of goods sold or inventory.

A Company Sold Merchandise with a Cost of $221 for $350