When a business sells inventory in exchange for cash, which of the following accounts is credited?

Question

Quizplus · Accepted Answer

When a business sells inventory in exchange for cash, the revenue account is credited. This recognizes the increase in the company's earnings from the sale of goods. Owners' Equity represents the residual interest in the assets of a business after liabilities are deducted, and is not affected by a simple sale transaction. Accounts Payable represents amounts owed to suppliers for goods or services purchased on credit, and is not a factor in a cash sale. Cash is simply the asset received in exchange for the inventory, and is debited, not credited, in the transaction.

When a Business Sells Inventory in Exchange for Cash, Which