Under the perpetual inventory system, what is the entry to record the cost price of goods sold for cash?

Question

Quizplus · Accepted Answer

Under the perpetual inventory system, the entry to record the cost price of goods sold for cash is to debit Cost of Sales and credit Inventory. This records the reduction of inventory and the expense incurred from the sale. No GST receivable account is involved in this transaction. Option A is incorrect as it includes GST receivable, which is not applicable to the given scenario. Option B is incorrect as it records the reduction of inventory only and does not record the expense incurred. Option D is incorrect as it records the reduction of purchases and not the cost of goods sold.

Under the Perpetual Inventory System, What Is the Entry to Record