When Using a Perpetual Inventory System, the Journal Entry to Record

question 153

Multiple Choice

When using a perpetual inventory system, the journal entry to record the cost of goods sold is:

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

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Definitions:

Alternative Technologies

Refers to the different methods, tools, or systems that can be used as substitutes to achieve the same goal or perform the same function in a process.

Hourly Price

The cost associated with purchasing a good or service for each hour it is used or consumed.

Production Technology

The methods, equipment, and processes used to produce goods and services.

Economic Profit

The split between total financial receipts and overall disbursements, considering both direct and hidden expenses.