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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When goods are sold on account, the sale is recorded by debiting Accounts Receivable and crediting Sales. The cost of goods sold is also recorded with a debit to Cost of Goods Sold and a credit to Inventory. Since this is a perpetual inventory system, the inventory balance is adjusted at the time of the sale. Therefore, options A and B are incorrect. Option C incorrectly credits the sales amount to Inventory instead of Accounts Receivable. Option D is the correct entry as it follows the general rule of debiting Accounts Receivable and crediting Sales.

A Company Sells Goods on Account at a Selling Price