In a periodic inventory system, the entry to record the sale of $2,000 of merchandise on account with a cost of $1,400 would include a:
A)credit to Accounts Receivable for $1,400.
B)debit to Accounts Receivable for $2,000.
C)debit to Cost of Goods Sold for $2,000.
D)credit to Inventory for $1,400.

Question

Quizplus · Accepted Answer

In a periodic inventory system, the sale of merchandise is recorded by debiting Accounts Receivable for the sale amount ($2,000 in this case) to recognize the revenue earned. The cost of goods sold and inventory adjustments are made at the end of the period, not at the time of each sale.

In a Periodic Inventory System, the Entry to Record the Sale