Asked by joseph sciotto on Jul 30, 2024
Verified
If the perpetual inventory system is used, an account entitled Cost of Goods Sold is included in the general ledger.
Perpetual Inventory System
An inventory management system that updates inventory records for each purchase and sale in real time.
Cost Of Goods Sold
The total expenses directly related to the production of goods sold by a company, including material and labor costs.
- Acquire knowledge about the functionality and criticality of the perpetual inventory method, particularly in handling returns and computing the cost of goods sold.
Verified Answer
HB
Hallie BrownJul 31, 2024
Final Answer :
True
Explanation :
In the perpetual inventory system, the Cost of Goods Sold account is updated with each sale, reflecting the cost of the inventory items sold. This account is included in the general ledger along with other accounts related to inventory, such as Purchases and Inventory on Hand.
Learning Objectives
- Acquire knowledge about the functionality and criticality of the perpetual inventory method, particularly in handling returns and computing the cost of goods sold.
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