MANAGEMENT

Detailed explanation-1: -Which of the following is not part of the journal entries made when merchandise is sold on credit? Credit the Cost of Goods Sold account.

Detailed explanation-2: -The first journal entry would be to record the sale of merchandise on account at sales price. This results in an increase to the asset account called accounts receivable and an increase to the revenue account sales. The second journal entry is to record the cost of the merchandise sold.

Detailed explanation-3: -What is a journal entry for cost of goods sold? The journal entry for cost of goods sold is a calculation of beginning inventory, plus purchases, minus ending inventory.

Detailed explanation-4: -Answer and Explanation: A Perpetual Inventory system is an inventory system that directly records the sold inventory to the cost of goods sold account. It also directly records its inventory purchases into an inventory account and does not use a purchases account and purchase discount account.

Detailed explanation-5: -Cost of Goods Sold (COGS) measures the “direct cost” incurred in the production of any goods or services. It includes material cost, direct labor cost, and direct factory overheads, and is directly proportional to revenue. As revenue increases, more resources are required to produce the goods or service.