A credit sale of \$5,275 to a customer would result in which of the following journal entries?

• A. Debit Sales Revenue \$5,275; Credit Accounts Receivable \$5,275
• B. Debit Accounts Receivable \$5,275; Credit Sales Revenue \$5,275
• C. Debit Cash \$5,275; Credit Sales Revenue \$5,275
• D. Debit Sales Revenue \$5,275; Credit Cash \$5,275

Answer: (B)

Verified step by step guidance

1. Understand the nature of the transaction: A credit sale means the company has sold goods or services to a customer on credit, meaning the customer will pay at a later date. This does not involve cash immediately.
2. Identify the accounts affected: For a credit sale, the two accounts involved are 'Accounts Receivable' (an asset account) and 'Sales Revenue' (a revenue account). Accounts Receivable increases because the company expects payment in the future, and Sales Revenue increases because the company has earned revenue from the sale.
3. Determine the journal entry format: In accounting, debits and credits must balance. For this transaction, 'Accounts Receivable' is debited because it is increasing (assets increase with debits), and 'Sales Revenue' is credited because it is increasing (revenues increase with credits).
4. Write the journal entry: The journal entry for this transaction would be: Debit Accounts Receivable \$5,275; Credit Sales Revenue \$5,275. This reflects the increase in assets and revenue due to the credit sale.
5. Review the incorrect options: The other options provided involve cash, which is not part of a credit sale, or incorrectly reverse the debit and credit accounts. Ensure you understand why the correct entry matches the nature of the transaction.