a-company-sells-a-product-for-100-that-cost-60-to-purchase-under-a-perpetual-inv

Question

A company sells a product for $100 that cost $60 to purchase. Under a perpetual inventory system, what is the net impact on the accounting equation?

Accepted Answer

Assets increase by $40, equity increases by $40.

Answer

Assets increase by $100, equity increases by $100.

Answer

Assets increase by $60, equity increases by $60.

Answer

Assets decrease by $60, equity decreases by $60.

A company sells a product for \$100 that cost \$60 to purchase. Under a perpetual inventory system, what is the net impact on the accounting equation?