The entries to record the cost and sale of a finished good on account is
A) debit Cost of Goods Sold, credit Finished Goods
B) debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales
C) debit Sales Expense, credit Finished Goods, credit Cash, credit Accounts Receivable
D) debit Work in Process, credit Finished Goods, debit Accounts Receivable, credit Sales

Question

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Recording the cost and sale of a finished good on account requires two separate entries. The first entry will debit Cost of Goods Sold and credit Finished Goods to account for the cost of producing the finished good. The second entry will debit Accounts Receivable and credit Sales to record the revenue earned from the sale of the finished good on account.

The Entries to Record the Cost and Sale of a Finished