Mullis Company sold merchandise on account to a customer for $625,terms n/30.The journal entry to record this sale transaction would be:
A)Debit Cash of $625 and credit Sales $625.
B)Debit Cash of $625 and credit Accounts Receivable $625.
C)Debit Accounts Receivable $625 and credit Sales $625.
D)Debit Accounts Receivable $625 and credit Cash $625.
E)Debit Sales $625 and credit Accounts Receivable $625.

Question

Quizplus · Accepted Answer

The sale was made on account, so cash is not involved in the transaction. Instead, the company would debit the Accounts Receivable account to show that the customer owes them money, and credit the Sales account to record the revenue earned from the sale.

Mullis Company Sold Merchandise on Account to a Customer for $625,terms