Bite-Size Learning 4: Sales of inventory

There are 2 sets of transactions in the sales. INVENTORY changes hand at cost price as well as CASH at Selling Price. Transaction 1:

Since the business received Cash.

Cash level increases, DR cash

The reason for cash increase was due to sales. Hence CR SALES

Transaction 2:

The business's Inventory level decrease as it is now transformed from an ASSETs into a COST of SALES.

Dr Cost of Sales (expenses increases) Cr Inventory (Assets decrease)

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