Question

Under the perpetual inventory system, in addition to making the entry to record a sale, a company would A. make no additional entry until the end of the period B. record an increase in inventory corresponding to the cost of the inventory. C. record an increase in inventory corresponding to the amount of the sale. D. record a decrease in inventory and an increase in cost of goods sold for the cost of the merchandise sold.

Answer 1

D)record a decrease in inventory and an increase in cost of goods sold for the cost of the merchandise sold.

Step-by-step explanation:

perpetual inventory system can be regarded as an inventory management method which involves the recording of real time transaction of stocks by application of technology , both sold and received stocks. This method has great efficiency compare to periodic inventory system. It should be noted that Under the perpetual inventory system, in addition to making the entry to record a sale, a company would record a decrease in inventory and an increase in cost of goods sold for the cost of the merchandise sold.