A company sells goods on account at a selling price of $20,000.The cost of the goods is $15,000.Under a perpetual inventory system the journal entries to record the sale will include:

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The journal entry to record the sale of goods on account would include a debit to Accounts Receivable (to record the increase in assets) and a credit to Sales (to record the increase in revenue). The cost of goods sold is not recorded at the time of sale, as it is recorded later when the goods are actually delivered to the customer. Therefore, options A and B are incorrect. Option C records a credit to Inventory for the sale, which is not correct as inventory is decreased when sold.

A Company Sells Goods on Account at a Selling Price