Under a Perpetual Inventory System, When a Sale Is Made

question 40

Multiple Choice

Under a perpetual inventory system, when a sale is made, the company:

• A) makes a journal entry to record the sale only.
• B) makes a journal entry to record only the cost of goods sold.
• C) makes a journal entry to record the sale and the cost of goods sold.
• D) does not need to make a journal entry.

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Definitions:

Rules of Interpretation

Guidelines and principles used to determine the meaning and intention of legal texts and statutory provisions.

Doctrine of Privity

A principle in contract law stating that contracts are binding only upon the parties signing the contract and no third party can enforce or be bound by the contract.

Contract Law

The body of law that governs the formation, enforcement, and interpretation of contractual agreements.

Clear Evidence

Highly convincing or indisputable proof that supports a claim, allegation, or decision.