Part of the Journal Entry to Record the Cost of an Item

question 48

Multiple Choice

Part of the journal entry to record the cost of an item for $28 that sold for $40 cash under the perpetual inventory system is:

• A)debit Sales,$40;credit Cost of Goods Sold,$28;credit Cash,$12.
• B)debit Cost of Goods Sold,$40;sales,$40.
• C)debit Cash,$40;credit Inventory $40.
• D)debit Cost of Goods Sold $28;credit Inventory,$28.

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Definitions:

Account Value

The total worth of a financial account, considering all assets and liabilities within the account.

Interest Rate

The percentage of a sum of money charged for its use, typically expressed annually.

Compound Interest

Interest earned on the base principal and on the interest accumulated during previous periods for both deposits and loans.

Simple Interest

Interest calculated only on the principal amount, or the initial amount of money borrowed or invested, not on the interest accumulated over time.