Jones Company sold merchandise on account for $90,000.This merchandise cost $52,000.The company uses the perpetual method of accounting for inventory.What would be the correct journal entry to record the transaction?

Question

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The journal entry to record the sale on account would be to debit Accounts Receivable for $90,000 and credit Sales for $90,000. To record the cost of goods sold, we would debit Cost of Goods Sold for $52,000 and credit Inventory for $52,000. Therefore, the correct journal entry is to debit Accounts Receivable for $90,000, credit Sales for $90,000, debit Cost of Goods Sold for $52,000, and credit Inventory for $52,000. This is option B.

Jones Company Sold Merchandise on Account for $90,000