Recording a Sale and Cost of Sale: Perpetual Inventory System

Your Answer ill-i XrMart uses the perpetual inventory system to account for its merchandise. On May 1, it sold $1,400 of merchandise on credit. The original cost of the merchandise to XeMart was $500. Demonstrate the required journal entry to record the sale and the cost of the sale by selecting OH of the correct actions below. (Check all that apply.) Credit Accounts Receivable $1,400. Reason: Accounts Receivable needs to be debited. Debit Cost of Goods Sold $500. Debit Merchandise Inventory $500. Reason: Merchandise Inventory needs to be credited for $500. Debit Accounts Receivable $1,400. Credit Merchandise Inventory $500. Credit Sales $1,400. Debit Sales $1,400.