Question

Archer Manufacturing had sales for the week of $3,145, of which $2,500 was on credit and $645 in cash sales. The cost of the merchandise sold was $1,716. The journal entries would include a

A.	debit to Cash for $3,145, credit to Sales for $3,145.
B.	debit to Cost of Goods Sold for $1,716; credit to Sales of $1,716.
C.	debit to Cash for $3,145 and a credit to Cost of Goods Sold for $3,145.
D.	debit to Cost of Goods Sold for $1,716; credit to Inventory for $1,716.

Answer 1

• The transaction will be recorded using the following two journal entries:

Accounts title	Debit	Credit
Cash	$                 645.00
Accounts receivables	$             2,500.00
Sales		$            3,145.00
(Sales recorded)
Cost of Goods Sold	$             1,716.00
Inventory		$            1,716.00
(Cost of Goods Sold recorded)

• Correct ANSWER = Option ‘D’ debit to Cost of Goods Sold for $1,716; credit to Inventory for $1,716.