Question

sold goods to Mahadevi journal entry​

Answer 1

Answer:

Everytime an item of inventory is sold, the physical transaction is as follows:

Your inventory is sold out and it had cost which is no longer part of your asset

You generate sales against receivable and cash at the selling price

Therefore, the journal entry is a two part entry as follows:

Debit: Cost of goods sold (cost value)

Credit: Inventory (cost value)

Debit: Receivable / cash / bank (sales value)

Credit: Sales (sales value)

As you can see, the above journal ensures that the books are balanced and the gross profit earned is incorporated in the books correctly.