California Company sold a product for $7,150 to Alliance Enterprises on credit.The cost of goods sold is $5,650.Assuming the firm is following a perpetual inventory system and using a sales journal,it will record $5,650 in the ________.

Question

Quizplus · Accepted Answer

The correct answer is B) Cost of Goods Sold DR, Merchandise Inventory CR column. This is because, in a perpetual inventory system, the cost of goods sold is immediately recorded at the time of sale by debiting Cost of Goods Sold and crediting Merchandise Inventory to reflect the reduction in inventory.

California Company Sold a Product for $7,150 to Alliance Enterprises