JournaldrillSale on account with cost
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
Mesa Electronics sells a home theater system to a customer on account for $3,200. The system cost Mesa $1,900. Mesa uses a perpetual inventory system. Record both the sale and the cost in one entry.
What this exercise teaches
The customer owes the $3,200 selling price, so Accounts Receivable is debited and Sales Revenue is credited. At the same time the goods leave inventory at their $1,900 cost, so Cost of Goods Sold is debited and Inventory is credited. The $1,300 difference is the gross profit on the sale.
A hint if you get stuck
A perpetual sale has two sides: the selling price owed by the customer, and the cost of the goods leaving the shelf.
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