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21 July, 13:08

Forever Jewelers uses the perpetual inventory system. On April 2, Forever sold merchandise with a cost of $1,500 for $7,000 to a customer on account with terms of 4/15, n/30. Which of the following jounal entries correctly records the sales revenue?

A. Accounts Receivable 6,720

Sales Revenue 6,720

B. Sales Revenue 6,720

Accounts Receivable 6,720

C. Sales Revenue 6,720

Cost of Goods Sold 6,720

D. Accounts Receivable 1,500

Sales Revenue 1,500

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Answers (1)
  1. 21 July, 13:12
    0
    A. Accounts Receivable 6,720

    Sales Revenue 6,720

    Explanation:

    The journal entry is shown below:

    Accounts receivable A/c Dr $6,720

    To Sales revenue A/c $6,720

    (Being merchandise sold on credit basis)

    The computation of sales revenue is shown below:

    = Sales revenue - discount

    = $7,000 - $7,000 * 4%

    = $7,000 - $280

    = $6,720

    To record we debited the account receivable account and credited the sales revenue account with $6,720 amount
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