3 on april 25, shineco. sold $1 000 worth of inventory for $1 700. based on the payment terms, the customer…
3 on april 25, shineco. sold $1 000 worth of inventory for $1 700. based on the payment terms, the customer will make one full payment on june 7. record the purchase which was made by the customer
Answer
Explanation:
Step1: Record accounts receivable
When a sale is made on credit (customer will pay later), we debit Accounts Receivable for the amount the customer owes. $$\text{Debit: Accounts Receivable } 1700$$
Step2: Record sales revenue
We credit Sales Revenue for the selling price of the inventory. $$\text{Credit: Sales Revenue } 1700$$
Step3: Record cost of goods sold
We debit Cost of Goods Sold for the cost of the inventory ($1000). $$\text{Debit: Cost of Goods Sold } 1000$$
Step4: Record inventory reduction
We credit Inventory for the cost of the inventory ($1000). $$\text{Credit: Inventory } 1000$$
Answer:
| Date | Account Name | Debit | Credit |
|---|---|---|---|
| April 25 | Accounts Receivable | 1700 | |
| Sales Revenue | 1700 | ||
| Cost of Goods Sold | 1000 | ||
| Inventory | 1000 |