Question

The entries to record cost and sale of a finished good on account is Group of answer choices debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales debit Cost of Goods Sold, credit Finished Goods debit Sales Expense, credit Finished Goods, credit Cash, credit Accounts Receivable debit Work in Process, credit Finished Goods, debit Accounts Receivable, credit Sales

Answer 1

Answer:

a. debit Cost of Goods sold, credit Finished Goods, debit Account Receivable, credit Sale

Explanation:

The journal entry is shown below:

For the cost of finished goods

Cost of goods sold Dr XXXXX

           To Finished goods XXXXX

(Being the cost of finished goods is recorded)

For recording this we debited the cost of goods sold as it increased the expenses and credited the finished goods as it decreased the assets

For the sale of finished goods on account

Account receivable Dr XXXXX

             To Sales XXXXX

(Being the sale of finished goods on account is recorded)

For recording this we debited the account receivable as it increased the assets and credited the sales as it also increased the revenue