Under the perpetual inventory system, the sale of goods is recorded with two entries. One entry debits Cash or Accounts Receivable and credits sales. The second entry

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The second entry in the perpetual inventory system records the cost of goods sold, which is debited to the Cost of Goods Sold account, and the amount of inventory sold is credited to the Merchandise Inventory account. This helps to keep track of the inventory levels and the cost of goods sold in real-time.

Under the Perpetual Inventory System, the Sale of Goods Is