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In: Accounting

Pots and Things, a cookware retailer, sells a coffee machine to a customer for $150. The...

Pots and Things, a cookware retailer, sells a coffee machine to a customer for $150. The customer pays $100 in cash and puts the rest on her store credit account. Which one of the following statements describes the most appropriate accounting for the transaction?

  • Debit cash $100; debit accounts receivable $50; credit cost of good sold $150

  • Debit cash $100; debit accounts receivable $50; credit revenues $150

  • Debit revenues $150; credit cash $100; credit accounts receivable $50

  • Debit cash $100; debit accounts receivable $50; credit inventory $150

Solutions

Expert Solution

Solution: Debit cash $100; debit accounts receivable $50; credit revenues $150

Explanation: As the sales are for $150 thus revenues will be credited for $150; Customer pays $100 cash thus thus cash account will be debited with $100; and remaining balance of $50 (=$150 - $100) will be debited to accounts receivable

ekkarill92 answered 2 years ago
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