Question

when merchandise is sold under the perpetual system of inventory, the journal entry to record a sale of merchandise on account includes debiting ______ and crediting sales.

a) accounts receivable

b) cost of goods sold

c) inventory

d) trial balance

Explanation:

In the perpetual inventory system, when merchandise is sold on account, the journal entry to record the revenue from the sale involves debiting the asset account representing the amount owed by the customer (Accounts Receivable) and crediting Sales (a revenue account). Cost of Goods Sold and Inventory are involved in the entry to record the cost of the goods sold, not the sales revenue entry. Trial Balance is a summary of accounts, not used in journal entries for sales. So the correct account to debit for the sales on account entry is Accounts Receivable.

Answer:

A) Accounts Receivable