Addison, Inc -When Using a Perpetual Inventory System, the Journal Entry to Information

question 104

Multiple Choice

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September:
$\begin{array} { r l l } \text { Sept. } 1 & \text { Inventory } & 20 \text { units at } \$ 20 \\ 4 & \text { Sale } & 10 \text { units } \\ 10 & \text { Purchase } & 30 \text { units at } \$ 25 \\ 17 & \text { Sale } & 20 \text { units } \\ 30 & \text { Purchase } & 10 \text { units at } \$ 30 \end{array}$
-When using a perpetual inventory system, the journal entry to record the cost of merchandise sold is

• A) debit Cost of Merchandise Sold; credit Sales
• B) debit Cost of Merchandise Sold; credit Merchandise Inventory
• C) debit Merchandise Inventory; credit Cost of Merchandise Sold
• D) No journal entry is made to record the cost of merchandise sold.

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Definitions:

Additional Resources

Resources available in addition to those already being used or allocated, often referring to economic or educational assets.

Factors Of Production

The inputs required for the creation of goods or services, typically classified into labor, capital, and natural resources.

Money

A medium of exchange that is universally accepted in an economy to facilitate the sale, purchase, or trade of goods and services.

Production Possibilities Curve

A graphical depiction showing the maximum number of goods and services that can be efficiently produced by an economy given its resources and technology.