Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A client wants to donate five widgets (set up as inventory items) to a charity. In the item setup, the cost is $5 and the
A client wants to donate five widgets (set up as inventory items) to a charity. In the item setup, the cost is $5 and the sales price is $10. Fifty widgets were originally purchased at $6 per widget.
What is the effect on the General Ledger when this is recorded on a Sales Receipt?
- A) Debit COGS $30; credit inventory $30
- B) Debit COGS $30; credit inventory $30; debit bank account $50; credit income $50
- C) Debit COGS $25; credit inventory $25; debit Bank account funds $50; credit income $50
- D) Debit COGS $25; credit inventory $25
- E) Debit Donations $30; credit inventory $30
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started