Question

Question: Journalize the following sales transactions for Paul Sportswear. Explanations are not required.

Aug. 1 Paul sold \(66,000 of women’s sportswear on account, credit terms are 2/10, n/30. Cost of goods is \)33,000. Paul uses the gross method to record sales revenue.

25 Paul receives payment from the customer on the amount due.

Short answer

Answer

The total of debits and credits is$165,000.

Step-by-step solution

Meaning of Accounts Receivable

The accounting term accounts receivable indicates the customers to whom sales are made on acredit basis, and the amount is yet to be received. It is considered an asset and reported under thecurrent asset section of thepositional statement.

Preparation of journal entries

Date	Accounts and Explanation	Debit ($)	Credit ($)
Aug 1	Accounts receivable	66,000
	Sales revenue		66,000
Aug 1	Cost of goods sold	33,000
	Merchandise inventory		33,000
Aug 25	Cash	66,000
	Accounts receivable		66,000