ECONOMICS

Detailed explanation-1: -Cost of goods sold is debited and finished goods inventory is credited for the sale of goods to a customer.

Detailed explanation-2: -Therefore, the cost of goods sold is a debit entry and not a credit entry. This means, when adding a COGS journal entry, you will debit your COGS Expense account and credit your Purchases and Inventory accounts. Inventory is the difference between the COGS Expense and Purchases accounts.

Detailed explanation-3: -When goods are sold, the Cost of Goods Sold account is debited and Work in Process Inventory account is credited. Total manufacturing costs for a period consists of the costs of direct materials used, the cost of direct labor incurred, and the manufacturing overhead applied during the period.

Detailed explanation-4: -When goods are sold on credit, debtors which is an asset account is debited as money is receivable from the customers and sales which is a revenue account is credited.

Detailed explanation-5: -Goods sold on account are credited to sales to record the sale of the goods then debit to accounts receivable.