Question
A company sold merchandise with a cost of $500 for $2,000 on account. The seller uses the perpetual inventory system. The entry to record the sale at the retail sales price is ________.
Answers
GPT-4o mini
In a perpetual inventory system, when a sale is made, two journal entries are typically required: one to record the sale and another to record the cost of goods sold.
1. **To record the sale at the retail sales price**:
You would debit Accounts Receivable (or Cash if it was a cash sale) and credit Sales Revenue.
**Journal Entry:**
```
Debit: Accounts Receivable (or Cash) $2,000
Credit: Sales Revenue $2,000
```
Thus, the entry to record the sale at the retail sales price is to debit Accounts Receivable for $2,000 and credit Sales Revenue for $2,000.
1. **To record the sale at the retail sales price**:
You would debit Accounts Receivable (or Cash if it was a cash sale) and credit Sales Revenue.
**Journal Entry:**
```
Debit: Accounts Receivable (or Cash) $2,000
Credit: Sales Revenue $2,000
```
Thus, the entry to record the sale at the retail sales price is to debit Accounts Receivable for $2,000 and credit Sales Revenue for $2,000.