Addison, Inc -When Using a Perpetual Inventory System, the Journal Entry to Information

question 104

Multiple Choice

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September:
$\begin{array} { r l l } \text { Sept. } 1 & \text { Inventory } & 20 \text { units at } \$ 20 \\ 4 & \text { Sale } & 10 \text { units } \\ 10 & \text { Purchase } & 30 \text { units at } \$ 25 \\ 17 & \text { Sale } & 20 \text { units } \\ 30 & \text { Purchase } & 10 \text { units at } \$ 30 \end{array}$
-When using a perpetual inventory system, the journal entry to record the cost of merchandise sold is

• A) debit Cost of Merchandise Sold; credit Sales
• B) debit Cost of Merchandise Sold; credit Merchandise Inventory
• C) debit Merchandise Inventory; credit Cost of Merchandise Sold
• D) No journal entry is made to record the cost of merchandise sold.

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Definitions:

Per Capita Income

The average income earned per person in a specific area or country.

World's Income

The total amount of economic output or earnings generated globally within a specific time period.

Productive Resources

The inputs used in the production of goods and services, typically categorized into land, labor, and capital.

Population Growth Rate

The population growth rate is a measure of how the number of individuals in a population increases or decreases over time, usually expressed as a percentage.