Question

A company purchased inventory for $800 per unit. The company later sold one unit of the inventory for cash of $1,500. Under the perpetual inventory system, which accounts will be debited to record the sales?

Answer 1

Under the perpetual inventory system, the accounts debited to record the sales are the Cost of Goods Sold (COGS) account and the Inventory account.

Step-by-step explanation:

Under the perpetual inventory system, the accounts debited to record the sales would be the Cost of Goods Sold (COGS) account and the Inventory account.

The Cost of Goods Sold (COGS) account represents the cost of the inventory that was sold, and it is debited to record the expense of the inventory sold. The Inventory account is debited to reduce the value of the inventory on hand after a sale has been made.

In this case, when the company sells one unit of the inventory for $1,500, the Cost of Goods Sold (COGS) account would be debited for $800, and the Inventory account would be debited for $800 as well:

• Cost of Goods Sold (COGS) Dr. $800
• Inventory Dr. $800
• Cash Cr. $1,500 (to record the sales)