In recording the cost of merchandise sold for cash using a perpetual inventory system,the effect on the accounts is

Question

Quizplus · Accepted Answer

When recording the cost of merchandise sold for cash using a perpetual inventory system, the Cost of Merchandise Sold account will increase to reflect the cost of the goods sold, and the Merchandise Inventory account will decrease to show that the inventory has been sold. Therefore, the correct answer is B, increase Cost of Merchandise Sold; decrease Merchandise Inventory. The increase in Sales (Option A) or Accounts Receivable (Option D) is not relevant to this transaction. Option C is incorrect as it suggests that the Merchandise Inventory account will increase, which is not the case when a sale is made.

In Recording the Cost of Merchandise Sold for Cash Using