Assume That a Perpetual Inventory System Is in Use

Multiple Choice

Assume that a perpetual inventory system is in use.Which of the following statements regarding the journal entries prepared is correct?

A) "Freight-out" or delivery costs associated with sales should be included in Cost of Goods Sold.
B) When a company receives payment from a customer for a sale, Cash is debited and Accounts Payable is credited.
C) When a company grants an allowance to a customer, Inventory is credited when using a perpetual inventory system.
D) When a customer returns inventory, the seller debits Sales Returns & Allowances under a perpetual inventory system.