A firm sold inventory for $350 that cost $221.The entry to record the cost of the inventory sold would be a:

Question

Quizplus · Accepted Answer

When recording the cost of inventory sold, we need to debit the Cost of sales account and credit the Inventory account, both for the amount of $221 (the cost of the inventory sold). Therefore, option A is the correct answer. Option B records the cash received and sales amount, which is not relevant to the cost of the inventory sold. Option C records the sales and cash received, but not the cost of the inventory sold. Option D reverses the entries, debiting the inventory account (which decreases it) and crediting the cost of sales account (which increases it), which is opposite of what should be recorded.

A Firm Sold Inventory for $350 That Cost $221