Under a Perpetual Inventory System, the Entry to Record a Sale

question 149

Multiple Choice

Under a perpetual inventory system, the entry to record a sale on account would include a debit to:

• A)Accounts Receivable and a credit to Sales Revenue for the retail price of the inventory.
• B)Inventory and a credit to Sales Revenue for the retail price of the inventory.
• C)Cost of Goods Sold and a credit to Inventory for the retail price of the inventory.
• D)Accounts Receivable and a credit to Sales Revenue for the cost of the inventory.

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Definitions:

Special Protections

Legal measures and regulations designed to ensure the safety and rights of specific groups of individuals or classes of subjects, typically those who are vulnerable or at risk.

Secured Creditors

Creditors who have a legal claim to specific assets of the debtor as collateral for the debt they are owed, providing them with a level of protection in case of the debtor's default.

Exempt

To be free from an obligation, duty, or liability to which others may be subject; typically used in contexts like taxes, legal requirements, or regulations.

Redemption

The buying back of one’s property after it has been sold. The right to redeem property sold under an order or decree of court is purely a privilege conferred by, and does not exist independently of, statute.