Wyman Corporation uses a process costing system.The company manufactured certain goods at a cost of $800 and sold them on credit to Percy Corporation for $1,075.The complete journal entry to be made by Wyman at the time of this sale is:
A)Debit Accounts Receivable $1,075;credit Sales $1,075;debit Cost of Goods Sold $800;credit Finished Goods Inventory $800.
B)Debit Accounts Receivable $1,075;credit Sales $275;credit Finished Goods Inventory $800.
C)Debit Cost of Goods Sold $1,075;credit Sales $1,075.
D)Debit Finished Goods Inventory $800;debit Sales $1,075;credit Accounts Receivable $1,075;credit Cost of Goods Sold $800.
E)Debit Accounts Receivable $1,075;debit Selling expense $800;credit Sales $1,075;credit Cost of Goods Sold $800.

Question

Quizplus · Accepted Answer

When goods are sold on credit, the seller records the sale by debiting Accounts Receivable and crediting Sales. The cost of the goods sold is recorded by debiting Cost of Goods Sold and crediting Finished Goods Inventory.

Wyman Corporation Uses a Process Costing System