Join thousands of students who trust us to help them ace their exams!
Multiple Choice
If you use a transaction scan device or another form of documentation to record a sale of merchandise for cash, which journal entry should be made?
A
Debit Cash; Credit Sales Revenue
B
Debit Inventory; Credit Cash
C
Debit Sales Revenue; Credit Cash
D
Debit Accounts Receivable; Credit Sales Revenue
0 Comments
Verified step by step guidance
1
Understand the nature of the transaction: The sale of merchandise for cash means the company receives cash immediately in exchange for goods or services provided.
Identify the accounts involved: Cash is received, so the Cash account increases (debit). Sales Revenue is earned, so the Sales Revenue account increases (credit).
Recall the accounting equation: Assets = Liabilities + Equity. Cash is an asset, and Sales Revenue contributes to equity through retained earnings.
Determine the journal entry: Debit the Cash account to reflect the increase in assets. Credit the Sales Revenue account to record the income earned.
Exclude other options: The other options involve incorrect accounts (e.g., Accounts Receivable is used for credit sales, not cash sales; Inventory is not directly credited in this transaction).