Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 25 - No. 22)
Which of the following is the correct entry when a company sells goods on credit, using the perpetual inventory method?
Debit Accounts Receivable, Credit Sales Revenue
Debit Cash, Credit Sales Revenue
Debit Cost of Goods Sold, Credit Inventory
Debit Inventory, Credit Cost of Goods Sold
Explanation
The first entry records the sale. The second entry reflects the reduction in inventory and increase in Cost of Goods Sold.
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