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9 June, 14:33

On march 12, klein company sold merchandise in the amount of $7,800 to babson company, with credit terms of 2/10, n/30. the cost of the items sold is $4,500. klein uses the perpetual inventory system and the gross method of accounting for sales. the journal entry or entries that klein will make on march 12 is:

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  1. 9 June, 15:52
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    The gross method of recording the sale is recording an account at its original price no deductions of the cash discounts offered.

    Perpetual Inventory system bring up-to-date the inventory accounts when there is an acquisition or sale.

    The journal entry would be:

    Debit:

    Accounts receivable 7,800

    Cost of goods sold 4,500

    Credit:

    Sales 7,800

    Merchandise inventory 4,500
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