BetterBuy Sells a Computer from Inventory for $599 on Credit

question 66

Multiple Choice

BetterBuy sells a computer from inventory for $599 on credit. BetterBuy originally bought the computer from IBM for $395 and uses the perpetual inventory system. How is the sale recorded in Bet terBuy's journal entries?

• A) Debit Cash for $599, credit Sales for $599; debit Inventory for $395 and credit Cost of Goods Sold for $395.
• B) Debit Accounts Receivable for $599, credit Inventory for $395, and credit Retained Earnings for $204.
• C) Debit Accounts Receivable for $599, credit Sales for $599; debit Cost of Goods Sold for $395 and credit Inventory for $395.
• D) Debit Inventory for $395, debit Cost of Goods Sold for $204, and credit Accounts Receivable for $599.

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Definitions:

Sign Test

A non-parametric statistical test used to assess the difference between matched pairs of samples when the specific data measurement scale does not meet the requirements for parametric testing.

Binomial Tables

Pre-calculated tables used to find the probability of observing a certain number of successes in a fixed number of binary experiments.

Large-sample Z Statistic

A statistical measure used when the sample size is large, typically applied in hypothesis testing to determine if there is a significant difference between sample statistics and population parameters.

Two-sample T-test

A statistical method used to test if there is a significant difference between the means of two groups.