**Journal Entry for Recording Costs**When preparing journal entries in accounting, it is important to follow a systematic approach. Below is a guide to recording cost-related transactions in a general journal.### InstructionThe task is to prepare the second journal entry to document the cost-related part of a transaction.**Note:** Always enter debits before credits.### General Journal Format| Date | General Journal | Debit | Credit ||----------|-----------------------------|-------|--------|| April 04 | | | || | | | || | | | || | | | || | | | |### Explanation- **Date Column:** This specifies the date when the transaction is recorded. - **General Journal Column:** This is where you describe the accounts affected by the transaction. Typically, the account to be debited is listed first, followed by the account to be credited.- **Debit and Credit Columns:** These columns are used to record the monetary amounts for the debits and credits.Always ensure that for each transaction, the total debits equal the total credits, maintaining the balance in the accounting equation. **Transaction Example: Perpetual Inventory System**In this example, a seller utilizes a perpetual inventory system. On April 4th, they sell $5,000 worth of merchandise, which originally cost $2,400, to a customer. This transaction takes place under credit terms of 3/10, n/30.**Explanation of Terms:**- **Perpetual Inventory System:** This is an accounting method where inventory records are updated continuously with each sale or purchase.- **Credit Terms of 3/10, n/30:** This means the buyer can take a 3% discount if the invoice is paid within 10 days. Otherwise, the full invoice amount is due within 30 days.There are no graphs or diagrams in the text.

Journal entry: It implies to the recording or accounting of the day-to-day financial transactions of…

Answered: A seller uses a perpetual inventory…

A seller uses a perpetual inventory system and on April 4 it sells $5,000 in merchandise with a cost of $2,400 to a customer on credit terms of 3/10, n/30.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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