On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the gross method of accounting for sales. The journal entry or entries that Klein will make on March 12 is (are):
A.
| Accounts receivable | 7,800 | |
| Sales | 7,800 | |
| Cost of goods sold | 4,500 | |
| Merchandise Inventory | 4,500 |
B.
| Sales | 7,800 | |
| Accounts receivable | 7,800 | |
| Cost of goods sold | 4,500 | |
| Merchandise Inventory | 4,500 |
C.
| Sales | 7,800 | |
| Accounts receivable | 7,800 |
D.
| Accounts receivable | 7,800 | |
| Sales | 7,800 |
E.
| Accounts receivable | 4,500 | |
| Sales | 4,500 |
Answer: A
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