Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

4. Merchandising Operations / Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory / Problem 7

Problem 7

A company sells a product for \$200 that cost \$120 to purchase. What is the net impact on equity under a perpetual inventory system?

Equity increases by \$200.

Equity remains unchanged.

Equity increases by \$80.

Equity decreases by \$120.