Explanation (1) Describe the sale of merchandise inventory on account. Date Accounts and Explanation Debit ($) Credit ($) Accounts Receivable 41,160 To Sales Revenue 41,160 (To record the sale of inventory on account) Table (1) Accounts Receivable is an asset and it is increased by $41,160. Therefore, debit accounts receivable with $41,160. Sales revenue is revenue and it increases the value of equity by $41,160. Therefore, credit sales revenue with $41,160. (2) Describe the entry for cost of goods sold. Date Accounts and Explanation Debit ($) Credit ($) Cost of Merchandise Sold 25,200 Merchandise Inventory 25,200 (To record the cost of goods sold) Table (2) Cost of merchandise sold is an expense account and it decreases the value of equity by $25,200. Therefore, debit cost of merchandise sold account with $25,200. Merchandise Inventory is an asset and it is decreased by $25,200. Therefore, credit inventory account with $25,200. (3) Describe the journal entry for sales return. Date Account Title and Explanation Post Ref. Debit ($) Credit ($) Customer Refunds Payable 1,960 Accounts Receivable 1,960 (To record sales returns) Table (3) Customer refunds payable is a liability account and decreased by $1,960...

Bundle: Accounting, Loose-Leaf Version, 26th + LMS Integrated for CengageNOW, 2 terms Printed Access Card

26th Edition

ISBN: 9781305715967

Author: Carl Warren, Jim Reeve, Jonathan Duchac

Publisher: Cengage Learning

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Chapter 6, Problem 6.11EX

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Sales is an activity of selling the merchandise inventory of a business.

To Describe: The sale of merchandise inventory on account.

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Bundle: Accounting, Loose-Leaf Version, 26th + LMS Integrated for CengageNOW, 2 terms Printed Access Card

Ch. 6 - What distinguishes a merchandising business from a...Ch. 6 - Can a business earn a gross profit but incur a net...Ch. 6 - The credit period during which the buyer of...Ch. 6 - Prob. 4DQ Ch. 6 - Prob. 5DQ Ch. 6 - Prob. 6DQ Ch. 6 - Who bears the freight when the terms of sale are...Ch. 6 - Name four accounts that would normally appear in...Ch. 6 - Audio Outfitter Inc., which uses a perpetual...Ch. 6 - Assume that Audio Outfitter Inc. in Discussion...

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Sales is an activity of selling the merchandise inventory of a business. To Describe: The sale of merchandise inventory on account.

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