In a Perpetual Inventory System, Two Entries Are Normally Made

question 144

Multiple Choice

In a perpetual inventory system, two entries are normally made to record each sales transaction. The purpose of these entries is best described as follows:

• A) One entry recognizes the sales revenue and the other recognizes the cost of goods sold.
• B) One entry records the purchase of inventory and the other records the sale.
• C) One entry records the cost of goods sold and the other reduces the balance in the Inventory account.
• D) One entry updates the subsidiary ledger and the other updates the general ledger.

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