PRC-1 · Chapter 7 · Question 61 of 100
A company uses a periodic inventory system. Which of the following is correct for recording a credit sales transaction?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debit Receivables & Credit Sales only
Explanation
Under a periodic inventory system, the inventory account is not updated continuously. Therefore, only the revenue side (Debit Receivables, Credit Sales) is recorded at the time of the sale.
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