Question

Maxie's Game World sold games to a customer on credit for $4,400, terms 1/10, n/30 and the cost of the games was $3,500. When recording the sales transaction in its sales journal, Maxie’s would enter:

What is the correct answer?

Multiple Choice

• $3,500 in the Accounts Receivable Dr./Sales Cr. column and $4,400 in the Cost of Goods Sold Dr./Inventory Cr.column.

• $4,400 in the Accounts Receivable Dr./Sales Cr. column and $3,500 in the Accounts Payable Dr./Purchases Cr. column.

• $4,400 in the Accounts Receivable Dr./Sales Cr. column and $4,400 in the Cash Cr. column.

• $4,400 in the Accounts Receivable Dr./Sales Cr. column and $3,500 in the Cost of Goods Sold Dr./Inventory Cr. column.

• $3,500 in the Accounts Receivable Dr./Sales Cr. column and $4,400 in the Other Accounts Dr. column.

Answer 1

Answer- While recording the sales transaction in its sales journal, Maxie’s would enter= $4400 in the Accounts Receivable Dr./Sales Cr. column and $3500 in the Cost of Goods Sold Dr./Inventory Cr. column.

Explanation- The journal entry to record the transactions are as follows-

S.No.	ACCOUNTS TITLES & EXPLANATION	DEBIT	CREDIT
		$	$
1	Accounts Receivable	4400
	Sales		4400
	(Being entry recorded for sales)
S.No.	ACCOUNTS TITLES & EXPLANATION	DEBIT	CREDIT
		$	$
2	Cost of goods sold	3500
	Inventory		3500
	(Being entry recorded for goods used for sales)