A Company That Uses the Perpetual Inventory System Sold Goods $$\begin{array} { | c | l | l | } \hline \text { Accounts receivable } & 2500 & \\\hline \text { Cash } & & 2500 \\\hline\end{array}$$

question 4

Multiple Choice

A company that uses the perpetual inventory system sold goods to a customer on account for $2500 The cost of the sales was $1250.Which of the following journal entries correctly records this transaction?

• A) \[\begin{array} { | c | l | l | }
• \hline \text { Accounts receivable } & 2500 & \\
• \hline \text { Cash } & & 2500 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | l | l | }
• \hline \text { Accounts receivable } & 2500 & \\
• \hline \text { Sales revenue } & & 2500 \\
• \hline
• \end{array}\]
• \[\begin{array} { | c | l | l | }
• \hline \text { Costs of sales } & \$ 1250 & \\
• \hline \text { Inventory } & & \$ 1250 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | l | l | }
• \hline \text { Cost of sales } & 2500 & \\
• \hline \text { Sales revenue } & & 2500 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | l | l | }
• \hline \text { Inventory } & 2500 & \\
• \hline \text { Costs of sales } & & 2500 \\
• \hline
• \end{array}\]

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Definitions:

Segment Margin

The amount of profit or loss generated by a specific division or segment of a company, excluding common costs shared across segments.

Variable Expenses

Expenses that change in proportion with a company's activity level, such as materials and labor directly involved in production.

Traceable Fixed Expenses

Fixed costs that can be directly associated with a specific business segment or project.

Variable Costing

An accounting method that only considers variable costs for product costing and decision-making, excluding fixed costs from the calculations of net profit.