Under the Perpetual Inventory System, the Journal Entry to Record

question 124

Multiple Choice

Under the perpetual inventory system, the journal entry to record the freight paid by the seller on goods sold is:

• A) \[\begin{array} { | l | l | l | }
• \hline \text { Accounts Receivable } & XX & \\
• \hline \text { Freight Out } & & XX \\
• \hline \text { Sales Revenue } & &XX \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Delivery Expenses } & \chi \chi & \\
• \hline \text { Cash } & & \chi \chi \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Cost of Goods Sold } & \chi \chi & \\
• \hline \text { Cash } & & \chi \chi \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Merchandise Inventory } & \chi \chi & \\
• \hline \text { Cash } & & \chi \chi \\
• \hline
• \end{array}\]

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Definitions:

Long Run

A period in which all inputs, including capital, are variable, allowing firms to adjust all factors of production.

Economic Costs

The comprehensive expense incurred from selecting one option over another, covering both direct and indirect costs.

Own Capital

The personal resources that an investor or business owner invests into a business venture.

Economic Costs

Total expenses incurred in the production of goods and services, including both explicit and implicit costs.