Landon Jewelers uses the perpetual inventory system. On April 2, Landon sold merchandise with a cost of $ 3 comma 500 for $ 7 comma 000 to a customer on account with terms of 1 /15, n/30. The journal entry to record the cost of goods sold would be:

A. Merchandise Inventory - 2,500, Cost of Goods Sold - 2,500

B. Cost of Goods - 2,500, Accounts Receivable - 2,500

C. Cost of Goods Sold - 2,500, Merchandise Inventory - 2,500

D. Sales Revenue - 2,500, Cost of Goods Sold - 2,500

Question

Business

Katelyn

26 November, 06:17

Landon Jewelers uses the perpetual inventory system. On April 2, Landon sold merchandise with a cost of $ 3 comma 500 for $ 7 comma 000 to a customer on account with terms of 1 /15, n/30. The journal entry to record the cost of goods sold would be:

A. Merchandise Inventory - 2,500, Cost of Goods Sold - 2,500

B. Cost of Goods - 2,500, Accounts Receivable - 2,500

C. Cost of Goods Sold - 2,500, Merchandise Inventory - 2,500

D. Sales Revenue - 2,500, Cost of Goods Sold - 2,500

+4

Answers (1)

Know the Answer?

Alan Wilson · Answer 1

C. Cost of Goods Sold - 2,500, Merchandise Inventory - 2,500

Explanation:

The journal entry would be:

Account Debit Credit

Cost of Goods Sold $2,500

Merchandise Inventory $2,500

When a cost increases, it is debited, and when an asset, such as inventory, decreases, it is credited.