Question

Sales Transactions Journalize the following merchandise transactions: a. Sold merchandise on account, $20,700 with terms 1/10,...

Sales Transactions

Journalize the following merchandise transactions:

a. Sold merchandise on account, $20,700 with terms 1/10, n/30. The cost of the goods sold was $12,420.

Sale Accounts Receivable
  • Accounts Payable
  • Accounts Receivable
  • Cash
  • Cost of Merchandise Sold
  • Merchandise Inventory
  • Miscellaneous Expense
  • Purchases
  • Purchases Discounts
  • Purchases Returns and Allowances
  • Sales Discounts
  • Sales Returns and Allowances
  • Sales
Sales
  • Accounts Payable
  • Accounts Receivable
  • Cash
  • Cost of Merchandise Sold
  • Purchases Discounts
  • Purchases Returns and Allowances
  • Purchases
  • Sales
  • Sales Discounts
  • Sales Returns and Allowances
Cost Cost of Goods Sold
  • Accounts Payable
  • Accounts Receivable
  • Cash
  • Cost of Goods Sold
  • Merchandise Inventory
  • Miscellaneous Expense
  • Purchases
  • Purchases Discounts
  • Purchases Returns and Allowances
  • Sales
  • Sales Discounts
Inventory
  • Accounts Payable
  • Accounts Receivable
  • Cash
  • Cost of Merchandise Sold
  • Inventory
  • Miscellaneous Expense
  • Purchases
  • Purchases Discounts
  • Purchases Returns and Allowances
  • Sales
  • Sales Discounts
  • Sales Returns and Allowances

Feedback

(a) When the perpetual inventory system is used, two entries are recorded each time a sale is made. In the first entry, accounts receivable and the sale are recorded, less the discount. A second entry records the cost of the merchandise sold and the reduction of inventory on hand.

Learning Objective 2.

b. Received payment less the discount.

Cash
  • Accounts Payable
  • Accounts Receivable
  • Cash
  • Cost of Merchandise Sold
  • Merchandise Inventory
  • Miscellaneous Expense
  • Purchases
  • Purchases Discounts
  • Purchases Returns and Allowances
  • Sales
  • Sales Returns and Allowances
Accounts Receivable
  • Accounts Payable
  • Accounts Receivable
  • Cash
  • Cost of Merchandise Sold
  • Merchandise Inventory
  • Miscellaneous Expense
  • Purchases
  • Purchases Discounts
  • Purchases Returns and Allowances

Feedback

(b) The exercise assumes the invoice will be paid within the discount period, so the seller records the sale at the discounted amount.

Learning Objective 2.

c. Refunded $230 to customer for defective merchandise that was not returned.

Customer Refunds Payable
  • Accounts Payable
  • Accounts Receivable
  • Cash
  • Customer Refunds Payable
  • Merchandise Inventory
  • Miscellaneous Expense
  • Purchases
  • Purchases Discounts
  • Purchases Returns and Allowances
  • Sales
  • Sales Returns and Allowances
Cash
  • Accounts Payable
  • Accounts Receivable
  • Cash
  • Customer Refunds Payable
  • Merchandise Inventory
  • Miscellaneous Expense
  • Purchases
  • Purchases Discounts
  • Purchases Returns and Allowances
  • Sales
  • Sales Returns and Allowances

Homework Answers

Answer #1
a Accounts Receivable Debit          20,493
Discount Debit                207
Sales Credit          20,700
Cost of Merchandise Sold Debit          12,420
Merchandise Inventory Credit          12,420
b Cash Debit 20493
Accounts Receivable Credit 20493
c

Sales Returns

Debit 230
Accounts Receivable Credit 230
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