Concept explainers
What is the name of the account used to record sales of merchandise inventory?
Name the account that is used to record sales of merchandise inventory.
Explanation of Solution
Sale Transaction:
A sale transaction is a financial transaction in which the goods or services offered by an organization are transferred to its customers for a consideration. Sale transaction may involve elements of discount and taxes.
In a merchandising business goods are purchased by an entity and resold to its customers.
Accounts used to record sales of merchandise inventory are Sales account and Cash account. Sales transaction is recorded by debiting Cash account and crediting Sales account.
In case, sale is made on account instead of cash then, Accounts receivables account is debited instead of Cash account.
Want to see more full solutions like this?
Chapter 7 Solutions
COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
- Which of the following accounts are used when recording the sales entry of a sale on credit? A. merchandise inventory, cash B. accounts receivable, merchandise inventory C. accounts receivable, sales D. sales, cost of goods soldarrow_forwardUnder the perpetual inventory system, how does the seller record sales made on account?arrow_forwardWhich of the following accounts are used when recording a purchase using a periodic inventory system? A. cash, purchases B. accounts payable, sales C. accounts payable, accounts receivable D. cash, merchandise inventoryarrow_forward
- Which of the following accounts are used when recording a purchase? A. cash, merchandise inventory B. accounts payable, merchandise inventory C. A or B D. cash, accounts payablearrow_forwardWhat is a perpetual inventory accounting system? What journal entries are involved?arrow_forwardWhat accounts are used to recognize a retailers purchase from a manufacturer on credit? A. accounts receivable, merchandise inventory B. accounts payable, merchandise inventory C. accounts payable, cash D. sales, accounts receivablearrow_forward
- On which financial statement would the merchandise inventory account appear? A. balance sheet B. income statement C. both balance sheet and income statement D. neither balance sheet nor income statementarrow_forwardUnder the periodic inventory system, the ending inventory is entered by debiting Merchandise Inventory and crediting Income Summary.arrow_forwardRules of debit and credit for periodic inventory accounts Complete the following table by indicating for A through G whether the proper answer is debit or credit:arrow_forward
- Under the retail inventory method, freight-in would be included in the calculation of the goods available for sale for which of the following?arrow_forwardUsing the partial work sheet provided below, prepare the adjusting entries for merchandise inventory.arrow_forwardWhat is the general rule used to determine if a company includes an item in inventory?arrow_forward
- College Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning