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

Question

Quizplus · Accepted Answer

The entry to record the cost of goods sold would involve debiting the Cost of Goods Sold account and crediting the Inventory account, as the merchandise sold was originally recorded as inventory. The amount of cost incurred is $221, not the sales price of $350 or the cash received, so options A and B are incorrect. Option D involves debiting the Inventory account for the incorrect amount of $350, so it is also incorrect.

A Company Sold Merchandise for $350 That Cost $221