Question

Which of the following is correctly included in the entry to record the sale of finished goods? Select one: A. CREDIT to Finished Goods Inventory B. CREDIT to Cost of Goods Sold C. DEBIT to Accounts Payable D. DEBIT to Sales Revenue E. CREDIT to Work in Process Inventory

Answer 1

Answer:

A. CREDIT to Finished Goods Inventory

Explanation:

The journal entry is shown below:

Cash or Account receivable  XXXXX

       To Sales revenue  XXXXX

(being the sales revenue is recorded)

Cost of goods sold XXXXX

   To Finishes goods inventory  XXXXX

(Being the cost of goods sold is recorded)

So while recording the sale of finished goods we credited to the finished goods inventory account