Under the periodic inventory system, in addition to making the entry to record a sale, a company would

A. Debit merchandise inventory and credit cost of goods sold.

B. Debit costs of goods sold and credit merchandise inventory.

C. Debit cost of goods sold and credit purchases.

D. Make no additional entry.

Question

Saul Massey

Business

31 August, 09:15

Under the periodic inventory system, in addition to making the entry to record a sale, a company would

A. Debit merchandise inventory and credit cost of goods sold.

B. Debit costs of goods sold and credit merchandise inventory.

C. Debit cost of goods sold and credit purchases.

D. Make no additional entry.

+2

Answers (1)

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Nikhil Turner · Answer 1

This would be a B.) Debit cost of goods sold and a credit merchandise inventory. Since you have made a sale, you now have to record the cost of the item that you sold, hence you debit the cost of goods sold since you have increased your cost of goods sold account. After that, since you have made a sale, you have lessened your merchandise inventory. So with that, you record taking the items from the inventory by making a credit to merchandise inventory.