Tangent Corporation sold a product for $7,150 to Michael Cardon on credit.The cost of goods sold is $5,650.Assuming the firm is following a perpetual inventory system and using a sales journal,it will record $5,650 in the ________.
A)Accounts Receivable DR,Sales Revenue CR column
B)Cost of Goods Sold DR,Merchandise Inventory CR column
C)Merchandise Inventory DR,Cost of Goods Sold CR column
D)Sales Revenue DR,Accounts Receivable CR column

Question

Quizplus · Accepted Answer

The cost of goods sold is recorded in the cost of goods sold (CGS) column of the sales journal, decreasing the inventory value in the merchandise inventory (MI) column. Therefore, the appropriate choice is B. The other choices are incorrect because they do not properly account for the cost of goods sold.

Tangent Corporation Sold a Product for $7,150 to Michael Cardon