Author Question: Under the perpetual inventory system, the sale of goods is recorded with two entries. One entry ... (Read 49 times)

mpobi80 · **on:** Jul 6, 2018

Under the perpetual inventory system, the sale of goods is recorded with two entries. One entry debits Cash or Accounts Receivable and credits sales. The second entry
a. debits Cost of Goods Sold and credits Merchandise Inventory.
b. debits Merchandise Inventory and credits Cost of Goods Sold.
c. debits Cost of Goods Sold and credit Purchases.
d. debits Purchases and credits Merchandise Inventory.
e. debits Income Summary and credits Cost of Goods Sold.

Question 2

Capital lease debt service paid from the General Fund will be reported as

a. an increase in capital assets equal to the amount of principal retired.
b. expenditures for interest only.
c. expenditures for principal reduction only.
d. expenditures for the full amount of the debt service payment.
e. an other financing use.