Bayer Company uses the periodic inventory system. Bayer Company sold goods on ac

Question

Bayer Company uses the periodic inventory system. Bayer Company sold goods on account with a retail price of $800 and a cost of $500. What journal entries are prepared?

.

A.

debit Accounts Receivable for

$ 500

and credit Sales Revenue for

$ 500

.

B.

debit Inventory for

$ 500

and credit Purchases for

$ 500

.

C.

debit Accounts Receivable for

$ 800

and credit Sales Revenue for

$ 800

,

debit Cost of Goods Sold for

$ 500

and credit Inventory for

$ 500

.

D.

debit Accounts Receivable for

$ 800

and credit Sales Revenue for

$ 800

.

Explanation / Answer

For sales: Journal

Accounts receivable A/c Dr 800

To Sales revenue A/c 800

For Cost of goods sold recording: Journal

Cost of goods sold A/c Dr 500

To Inventory A/c 500

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