Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of inventory costing $620 for $960 on account? A. Inventory 620 Cost of Goods Sold 620 Sales Revenue 960 Accounts Receivable 960 B. Accounts Receivable 960 Sales Revenue 960 Cost of Goods Sold 620 Inventory 620 C. Inventory 620 Gain 340 Sales Revenue 960 D. Accounts Receivable 960 Sales Revenues 620 Gain 340

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7 December, 01:17

Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of inventory costing $620 for $960 on account? A. Inventory 620 Cost of Goods Sold 620 Sales Revenue 960 Accounts Receivable 960 B. Accounts Receivable 960 Sales Revenue 960 Cost of Goods Sold 620 Inventory 620 C. Inventory 620 Gain 340 Sales Revenue 960 D. Accounts Receivable 960 Sales Revenues 620 Gain 340

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Answers (2)

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Sharon · Answer 1

Answer: (B.) Accounts Receivable = 960

Sales Revenue = 960

Cost of Goods Sold = 620

Inventory = 620

Explanation:

Given : Sale of inventory costing $620 for $960 on account.

∴ The following particulars will be recorded as follow:

Accounts Receivable = 960

Sales Revenue = 960

Cost of Goods Sold = 620

Inventory = 620

Winston Kennedy · Answer 2

Answer: the correct answer is B. Accounts Receivable $960 sales Revenue $960 Cost of Goods Sold $620 Inventory $620.

Explanation:

The essense of double entry accounting is that in each amount in the credit corresponds an amount in the debit or vice versa.