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1 September, 08:13

Cumberland Co. sells $2,000 of inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entry (ies) would be recorded?

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  1. 1 September, 08:24
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    Cash (Debit) $2,000

    Sales (Credit) $2,000

    Cost of Merchandise Sold (Debit) $1,250

    Merchandise Inventory (Credit) $1,250

    Explanation:

    Cash (Debit) : Cash increase because it is a Cash Sale, cash increases by debit.

    Sales (Credit) : to register the sale, Sales (income) increases by credit.

    Cost of Merchandise Sold (Debit) : to record the cost of the merchandise sold, the costs increase by debit.

    Merchandise Inventory (Credit) : to record the inventory output of the merchandise sold, inventory decreases by credit.
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Home » Business » Cumberland Co. sells $2,000 of inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entry (ies) would be recorded?
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