Question

17. Andy Store sold merchandise in the amount of $5,800 to a customer on October 1, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Andy uses the perpetual inventory system. The journal entries that Andy will make on October 1 will include: A) Debit to Accounts Receivable for $4,000 B) Credit to Merchandise Inventory for $5,800 C) Debit to Cost of Goods Sold for $5,800 D) Credit to Merchandise Inventory for $4,000 E) Credit to Net Income for $1,800

Answer 1

Answer:

D) Credit to Merchandise Inventory for $4,000

Explanation:

Date  Account and Explanation Debit ($)  Credit ($)

         Account Receivable              5,800  

                 Sale                                          5,800

        (Recorded the sale on credit)

           Cost of goods sold            4,000

                  Merchandise Inventory                4,000

           (Recorded the cost of goods sold)