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Proprietorship
I.
Learning objectives
2.
8-1
As the goods are sold, two entries are needed: one to recognize the
revenue earned, and the second to transfer the cost of the goods out of
inventory (into cost of goods sold)
Example: Sold 20 books for cash at 25 Yuan each
Cash
Sales
+ +
500
500
Merchandise inventory
+
+
Beginning bal. 2000 400
2000
8-2