In a Perpetual Inventory System, the Entry to Record the Cost

question 112

Multiple Choice

In a perpetual inventory system, the entry to record the cost of goods sold always includes an entry of equal amount to the:

• A) Inventory account.
• B) Sales account.
• C) Purchases account.
• D) None of the above.

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Definitions:

Statute of Frauds

A legal principle requiring certain types of contracts to be written and signed to be enforceable, such as contracts for the sale of real estate or agreements not to be performed within a year.

Sale of Goods

The sale of goods refers to the transaction between a seller and a buyer where specific goods are transferred from the seller to the buyer for a price.

Statute of Frauds

A legal principle that requires certain contracts to be in writing and signed by the parties involved, to be enforceable.

Lease of Goods

A contractual agreement in which one party, the lessor, grants the other party, the lessee, the right to use an asset, such as equipment or vehicles, for a specified period in exchange for payment.