A computer manufacturer recently shipped several laptops to a customer (cost: $25,000)and billed the customer $30,000.Which of the following options correctly expresses the accounts that are debited and credited to record this transaction?
A)Debits: Accounts Receivable,Finished-Goods Inventory;credits: Sales Revenue,Cost of Goods Sold.
B)Debits: Accounts Receivable,Cost of Goods Sold;credits: Sales Revenue,Finished-Goods Inventory.
C)Debits: Sales Revenue,Cost of Goods Sold;credits: Accounts Receivable,Finished-Goods Inventory.
D)Debits: Sales Revenue,Finished-Goods Inventory;credits: Accounts Receivable,Cost of Goods SolD.
E)Debits: Accounts Receivable;credits: Finished-Goods Inventory,Profit on SalE.

Question

Quizplus · Accepted Answer

Accounts Receivable is debited because the customer owes money for the purchase. Cost of Goods Sold is also debited to recognize the cost of producing the laptops. Sales Revenue is credited for the amount billed to the customer, and Finished-Goods Inventory is credited to reflect the reduction in inventory as a result of the sale.

A Computer Manufacturer Recently Shipped Several Laptops to a Customer