A Company That Uses the Perpetual Inventory System Purchased an Order

question 144

Multiple Choice

A company that uses the perpetual inventory system purchased an order of 500 pallets of industrial soap for $8,000 and paid $750 for the freight-in.The company sold the whole lot to a supermarket chain for $10,000 on account.The company uses the specific-identification method of inventory costing.Which of the following entries correctly records the Cost of goods sold?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Cost of goods sold } & 8,750 & \\
• \hline \text { Inventory } & & 8,750 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Inventory } & 8,750 & \\
• \hline \text { Cost of goods sold } & & 8,750 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Cost of goods sold } & 8,000 & \\
• \hline \text { Sales revenue } & & 8,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Cost of goods sold } & 8,000 & \\
• \hline \text { Inventory } & & 8,000 \\
• \hline
• \end{array}\]

---

Definitions:

Curriculum

A structured set of educational experiences, courses, or programs designed to achieve specific learning objectives or qualifications.

Low Enrollment

Situations where the number of individuals who sign up for a program, course, or institution falls below expected or desired levels.

Successful Change

The effective implementation of new strategies, structures, or processes in an organization, which achieves intended outcomes and is accepted by stakeholders.

Capability

An individual's or organization's inherent ability or capacity to carry out a particular task or to achieve certain outcomes.