When Using a Perpetual Inventory Method, What Account(s) Must Be

question 76

Multiple Choice

When using a perpetual inventory method, what account(s) must be updated when a sale is recognized?

• A) Cost of Goods Sold
• B) Supplies
• C) Merchandise Inventory
• D) Both A and C are correct.

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Definitions:

Operating Results

The outcome of a company's core business operations, indicating profitability or loss over a certain period.

Fiscal Year

A 12-month period used by governments and businesses for accounting purposes, which may or may not align with the calendar year.

Quarterly Reporting

The process of disclosing a company's financial performance and position every three months to stakeholders.

Permanent Loss

A loss that is not expected to be recovered in the future and has a lasting effect on asset value.