Using a Perpetual Inventory System, the Entry to Record the Sale

question 153

Multiple Choice

Using a perpetual inventory system, the entry to record the sale of merchandise on account includes a

• A) debit to Sales
• B) debit to Merchandise Inventory
• C) credit to Merchandise Inventory
• D) credit to Accounts Receivable

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Definitions:

Budgeted Sales

The anticipated revenue from goods or services a company plans to sell over a certain period, based on forecasts.

Direct Materials Budget

A financial plan that estimates the raw materials required for production and the cost associated with these materials for a specific period.

Cash Payments

Outflows of cash to settle obligations or purchase goods and services.

Total Cost

The sum of all expenses incurred in producing a product or providing a service, including fixed and variable costs.