Using a Perpetual Inventory System,which of the Following Entries Would

question 46

Multiple Choice

Using a perpetual inventory system,which of the following entries would record the cost of merchandise sold on credit?

• A) Credit Sales and debit Accounts Receivable
• B) Debit Cost of Goods Sold and credit Purchases
• C) Debit Cost of Goods Sold and credit Inventory
• D) Debit Inventory and credit Cost of Goods Sold

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Definitions:

Explicit Costs

Costs that involve direct monetary payment by a firm for the resources needed in production, such as wages and materials.

Implicit Costs

The opportunity costs of utilizing resources owned by the company for its operations instead of other purposes.

Accounting Profit

The financial gain calculated by subtracting total explicit costs from total revenues, excluding the consideration of implicit costs or opportunity costs.