Question

QUESTION 3 On November 30, 2019, Tate Comapny sold goods that cost 4,000 for a selling price of $6,000. The company sold the goods on account. The entry to record the sale is None of these are correct. debit Accounts Receivable and creidt Sales Revenue for $2,000 debit Accounts Receivable and creidt Sales Revenue for $6,000; and debit Cost of Goods Sold and credit Merchandise Inventory for $4,000. debit Accounts Receivable for $6,000; and credit Sales Revenue for $2,000 and credit Cost of Goods Sold for $4,000.

Answer 1

The entry to record the sale:

The correct option is

• debit accounts receivables and credit sales revenue for $6000 and debit cost of goods sold and credit merchandise inventory for $4000

Explanation:

When the goods of sales price of $6000 are sold on credit,

- the cash of $6000 has to be received later which is a current asset and should be debited and recorded as accounts recievable.

- the revenue of $6000 have been accrued and should be credited and recorded as sales revenue.

Accounts recivebale	$6000
Sales revenue		$6000

Also, the inventory costing $4000 has been moving out from the company because of sale.

- So, Cost of goods sold has been debited and correspondingly merchandise inventory should be credited.

Cost of goods sold	$4000
Merchandise inventory		$4000

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