Under the Perpetual System, When Merchandise Is Sold, the Journal

question 10

Multiple Choice

Under the perpetual system, when merchandise is sold, the journal entry would include a:

• A) debit to Merchandise Inventory; a credit to Accounts Payable or Cash.
• B) debit to Cost of Goods Sold; a credit to Merchandise Inventory.
• C) debit to Accounts Receivable or Cash and a credit to Sales.
• D) Both B and C are correct.

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Definitions:

Small Business Sector

The segment of the economy composed of independently owned companies that have fewer employees and lower revenue than larger corporations.

Traditional Distributor

A business that purchases products from manufacturers and sells them to retailers or end consumers, typically without significant alteration.

Automated

Refers to processes or systems operated with minimal human intervention, often using technology or machinery.

Online Exchange

A virtual platform where goods, services, or information are traded between parties over the internet.