Question

Landon Jewelers uses the perpetual inventory system. On April​ 2, Landon sold merchandise with a cost of $3,500 for $7,000 to a customer on account with terms of 3​/15, ​n/30. The journal entry to record the cost of goods sold would​ be:

A.
Merchandise Inventory
3,500
Cost of Goods Sold
3,500
B.
Sales Revenue
3,500
Cost of Goods Sold
3,500
C.
Cost of Goods Sold
3,500
Merchandise Inventory
3,500
D.
Cost of Goods Sold
3,500
Accounts Receivable
3,500

Answer 1

Answer: C.

Cost of Goods Sold

3,500

Merchandise Inventory

3,500

Step-by-step explanation:

A perpetual inventory system is a system thats uses records transactions that take place in real-time. Both the returns and the purchases are recorded immediately as they happen in the inventory account.

Under the perpetual inventory method, it should be noted that sales will be credited to the inventory while the purchases that are incurred will be debited to the inventory and it should be noted that the debit will be recorded in the account of the cost of goods sold.

Therefore based on the question, the journal entry to record the cost of goods sold would​ be:

Debit: Cost of goods sold $3500

Credit: Merchandise inventory $3500

Therefore, the correct option is C.