If merchandise costing $500 is sold on account for $620, how is this transaction

Question

If merchandise costing $500 is sold on account for $620, how is this transaction recorded when using a perpetual inventory system? Debit Accounts Receivable, credit Sales Revenue for $620; debit Cost of Goods Sold, and credit Inventory for $500 Debit Accounts Receivable and credit Sales Revenue for $620 Debit Cash and credit Sales Revenue for $620; debit Cost of Goods Sold and credit Inventory for $500 Debit Accounts Receivable and credit Sales Revenue for $620; debit Inventory and credit Cost of Goods Sold for $500

Explanation / Answer

If merchandise costing $ 500 is sold on account for $ 620, when using a perpetual inventory system :

The appropriate entry will be Debit Accounts Receivable and Credit Sales Revenue for $ 620 ; Debit Inventory and Credit Cost of Goods Sold for $ 500

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