Bijoux Company uses a perpetual inventory system. Its bookkeeper properly recorded a $5,000 sale on account, but forgot to record the related cost of the sale of $3,000. As a result of this error:.

Totall asset will be too high and total income will be too high.

Explanation:

Bijoux Company uses a perpetual inventory system. Its bookkeeper properly recorded a $5,000 sale on account, but forgot to record the related cost of the sale of $3,000. As a result of this error, the Total asset will be too high and net income will be too high.

The perpetual inventory system is an inventory tracking system that record, manage and maintain all transaction related to stock received or stock sold in real-time by use of technology. It is the most accurate and preferred system of recording inventory, it also records the movement of stocks.

In the given case, as it recorded a $5,000 sale on account, but forgot to record the related cost of the sale of $3,000, which will show total asset to be too high as sales are recored and cash has been recieved, however, net income will be too high as cost of the sale is not recorded.