If you use a transaction scan device or another form of documentation to record a sale of merchandise for cash, which journal entry should be made?

• A. Debit Cash; Credit Sales Revenue
• B. Debit Inventory; Credit Cash
• C. Debit Sales Revenue; Credit Cash
• D. Debit Accounts Receivable; Credit Sales Revenue

Answer: (A)

Verified step by step guidance

1. Understand the nature of the transaction: The sale of merchandise for cash means the company receives cash immediately in exchange for goods or services provided.
2. Identify the accounts involved: Cash is received, so the Cash account increases (debit). Sales Revenue is earned, so the Sales Revenue account increases (credit).
3. Recall the accounting equation: Assets = Liabilities + Equity. Cash is an asset, and Sales Revenue contributes to equity through retained earnings.
4. Determine the journal entry: Debit the Cash account to reflect the increase in assets. Credit the Sales Revenue account to record the income earned.
5. Exclude other options: The other options involve incorrect accounts (e.g., Accounts Receivable is used for credit sales, not cash sales; Inventory is not directly credited in this transaction).