To record the cost of inventory sold under a perpetual inventory, a debit to Cost of Goods Sold and a credit to Inventory is required.

Question

Quizplus · Accepted Answer

This is correct. Under perpetual inventory, the cost of goods sold is recorded at the time of sale by debiting the Cost of Goods Sold account and crediting the Inventory account. This ensures that the cost of goods sold is matched with the revenue generated from the sale.

To Record the Cost of Inventory Sold Under a Perpetual