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Question
Cumberland Co. sells $2,000 of merchandise to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following is the correct journal entry(ies)?
a. debit Cash, $2,000; credit Merchandise Inventory, $2,000
b. debit Cash, $2,000; credit Sales, $2,000; and debit Cost of Merchandise Sold, $1,250; credit Merchandise Inventory, $1,250
c. debit Cash, $1,250; credit Sales, $1,250
d. debit Accounts Receivable, $2,000; credit Sales, $2,000; and debit Cost of Merchandise Sold, $1,250; credit Merchandise Inventory, $1,250
Answer
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