Anderson Furniture sold 15 desks,with a cost of $7,500,for $13,250 on account.Anderson uses the periodic inventory system.Which of the following is the correct way to record this transaction?

Question

Quizplus · Accepted Answer

Option C represents the correct way to record the transaction. When using the periodic inventory system, the cost of goods sold is calculated at the end of the period by subtracting the inventory at the beginning of the period from the sum of goods purchased during the period and the inventory at the end of the period. As the cost of goods sold is not recorded at the time of sale, we credit sales revenue and accounts receivable for the total amount of the sale. We also debit accounts receivable for the sale price and debit cost of goods sold for the cost of the goods sold. Option C reflects these entries correctly.

Anderson Furniture Sold 15 Desks,with a Cost of $7,500,for $13,250