Southeastern Company sold merchandise for $4,450 to Northern Company on account.The cost of goods sold was $1,185.Southeastern Company uses a perpetual inventory system and special journals.The $4,450 is recorded as ________.

Question

Quizplus · Accepted Answer

The sale on account is recorded in the special journal as a credit to Accounts Receivable and a debit to Sales Revenue. In a perpetual inventory system, cost of goods sold is recorded at the time of sale and is not part of the journal entry for the sale. Option A is incorrect because the sale is recorded in a special journal, not the general journal. Option C is incorrect because the purchases journal is used to record purchases of merchandise, not sales. Option D is incorrect because the cash receipts journal is used to record cash receipts, not sales on account.

Southeastern Company Sold Merchandise for $4,450 to Northern Company on Account.The