Fancy Clothing Store made a sale for​ $2,000 and the customer used a credit​ card, the cost of these goods was​ $1,200. When a company uses the perpetual inventory system the journal entry would​ be:

Answer 1

In a perpetual inventory system, inventory and cost of goods sold are updated in real-time when a sale occurs. When Fancy Clothing Store makes a sale for $2,000 and the cost of goods sold is $1,200, the journal entries would be as follows:

1. To record the sale:

   • Debit Cash or Accounts Receivable (since the sale was made via credit card) for $2,000
   • Credit Sales Revenue for $2,000

2. To record the cost of goods sold:

   • Debit Cost of Goods Sold for $1,200
   • Credit Inventory for $1,200

Here are the journal entries:

1. Record the Sale:

   Debit: Cash or Accounts Receivable  $2,000
   Credit: Sales Revenue               $2,000

2. Record the Cost of Goods Sold:

   Debit: Cost of Goods Sold           $1,200
   Credit: Inventory                   $1,200

This reflects the increase in cash or accounts receivable, the revenue generated from the sale, and the reduction of inventory along with the recognition of the cost associated with the goods sold.