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What is the journal entry for the sale of goods on credit?
What is the journal entry for the sale of goods on credit?
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Practice Questions
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Q1
What is the journal entry for the sale of goods on credit?
Debit Cash, Credit Sales Revenue
Debit Accounts Receivable, Credit Sales Revenue
Debit Sales Revenue, Credit Accounts Receivable
Debit Sales Revenue, Credit Cash
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The correct entry is to debit Accounts Receivable to recognize the amount owed and credit Sales Revenue to record the sale.
Questions & Step-by-step Solutions
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Q
Q: What is the journal entry for the sale of goods on credit?
Solution:
The correct entry is to debit Accounts Receivable to recognize the amount owed and credit Sales Revenue to record the sale.
Steps: 5
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Step 1: Identify the sale of goods on credit. This means the customer will pay later, not immediately.
Step 2: Determine the amount of the sale. This is how much the customer owes for the goods sold.
Step 3: Create a journal entry. You will make two entries: one for the amount owed and one for the sale.
Step 4: Debit Accounts Receivable. This shows that the business expects to receive money from the customer in the future.
Step 5: Credit Sales Revenue. This shows that the business has made a sale and earned revenue.
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