Question

Faust Company uses the perpetual inventory method. Faust sold goods that cost $6,600 for $11,200. If the sale was made on account, the net effect of the sale will:

Answer 1

Answer:

Increase in total assets by $4,600

Explanation:

Faust sold goods that cost $6,600 for $11,200

Cost of goods sold A/c  Dr. $4,600

To inventory                                      $4,600

Account receivable A/c  Dr. $11,200

To sales                                               $11,200

(sale was made on account)

Net effect:

= $11,200 - $6,600

= $4,600

Therefore, there is an increase in total assets by $4,600.