If a company sold merchandise which cost $1,000 for a selling price of $3,000, the accounting equation would show a:

Question

Quizplus · Accepted Answer

The sale of the merchandise results in an increase in assets (cash or accounts receivable) of $3,000 and a corresponding increase in stockholders' equity (revenue) of $3,000. The cost of the merchandise sold ($1,000) is already accounted for in the calculation of net income. Therefore, there is no impact on liabilities.

If a Company Sold Merchandise Which Cost $1,000 for a Selling