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:

Growing Long Bone

Refers to the process of lengthening in bones of the skeleton during childhood and adolescence through the activity at growth plates.

Arm

A limb on the human body extending from the shoulder to the wrist, enabling a wide range of motion and dexterity.

Freely Movable

Pertains to joints in the body that allow significant movement in one or more directions, such as the shoulder or hip joints.

Gomphosis

A type of fibrous joint that anchors a tooth to its socket in the jaw.