A Company That Uses the Perpetual Inventory System Purchased 500 $$\begin{array} { | c | l | l | } \hline \text { Cost of sales } & 10,000 & \\\hline \text { Inventory } & & 10,000 \\\hline\end{array}$$

question 24

Multiple Choice

A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for $10,000 and paid $750 for the freight in.The company sold the whole lot to a supermarket chain for $13,000 on account.The company uses the specific-identification method of inventory costing.Which of the following entries correctly records the cost of sale?

• A) \[\begin{array} { | c | l | l | }
• \hline \text { Cost of sales } & 10,000 & \\
• \hline \text { Inventory } & & 10,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | l | l | }
• \hline \text { Cost of sales } & 10,750 & \\
• \hline \text { Inventory } & & 10,750 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | l | l | }
• \hline \text { Cost of sales } & 10,000 & \\
• \hline \text { Sales revenue } & & 10,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | l | l | }
• \hline \text { Inventory } & 10,750 & \\
• \hline \text { Cost of sales } & & 10,750 \\
• \hline
• \end{array}\]

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Definitions:

Steep

Characterizes an area of land having a sharp incline or slope, often referring to terrain that rises quickly over a short distance.

Heavily Cratered

Describes a surface, typically of a planet or moon, that contains a large number of impact craters from collisions with other celestial bodies.

Tectonic Belts

Regions of the Earth's crust that are extensively deformed by tectonic plate movements, often associated with earthquake and volcanic activity.

Less Cratered

Refers to planetary surfaces or celestial bodies that have fewer impact craters, often indicating geological activity or a younger surface age compared to heavily cratered areas.