The account distribution for sales of inventory on account is:
A)Debit Merchandise Inventory and Accounts Receivable; credit Cost of Goods Sold and Sales.
B)Debit Accounts Receivable/customer and Cost of Goods Sold; credit Sales and Merchandise Inventory.
C)Debit Accounts Payable/vendor and Cost of Goods Sold; credit Accounts Receivable/customer and Checking.
D)None.

Question

Quizplus · Accepted Answer

When inventory is sold on account, Accounts Receivable/customer is debited to record the increase in the amount owed by the customer. Cost of Goods Sold is also debited to record the expense of the sale. On the credit side, Sales is credited to record the revenue earned from the sale, and Merchandise Inventory is credited to reduce the account balance for the amount of inventory that was sold.

The Account Distribution for Sales of Inventory on Account Is