24E-h - Horngren'S Financial And Managerial Accounting

Question

Question: Journalize the following transactions for Marge’s Sofas. Explanations are not required.

h. Sold inventory on account, \(22,000; cost of goods sold, \)18,000.

 

Step-by-Step Solution

Answer

Date	Particulars	Debit ($)	Credit ($)
1.	Accounts receivable	22,000
	Sales revenue		22,000
2.	Cost of goods sold	18,000
	Finished goods inventory		18,000

Step-by-Step Solution: Step 1: Revenue

Revenue is explained as the income earned by the company by selling the goods manufactured by the company.

Step 2: Recording of Inventory sold and cost of goods sold in the books of the company

The sale of goods on account is recorded by debiting the accounts receivable account and by crediting the sakes revenue account.

The cost of goods sold is recorded by debiting the cost of goods sold and by crediting the finished goods inventory account.