Donaldson Corporation uses a periodic inventory system. On January 1, inventory is $253,000. On April 5, Donaldson sells inventory with a selling price of $75,000 on account. The cost of the inventory sold is $50,000. The journal entry (entries) to record the sale is (are) ________.
A) debit Cash and credit Sales Revenue
B) debit Accounts Receivable and credit Sales Revenue; debit Cost of Goods Sold and credit Inventory
C) debit Cash and Cost of Goods Sold and credit Sales Revenue and Inventory
D) debit Accounts Receivable and credit Sales Revenue

Question

Quizplus · Accepted Answer

In a periodic inventory system, the cost of goods sold is not recorded at the time of sale. Therefore, only the revenue side of the transaction is recorded, which involves debiting Accounts Receivable and crediting Sales Revenue.

Donaldson Corporation Uses a Periodic Inventory System