A Company Uses Perpetual Inventory in Connection with the Specific-Identification $$\begin{array} { | l | r | r | } \hline \text { Cash } & 14,400 & \\\hline \text { Sales revenue } & & 14,400 \\\hline\end{array}$$

question 14

Multiple Choice

A company uses perpetual inventory in connection with the specific-identification method.The company purchased 30 industrial diamonds for $500 per unit.Later in the month,they purchased another 20 diamonds from another supplier for $480 per unit.On the last day of the month,they sold 18 diamonds to a customer at a price of $800 per unit.Of the 18 diamonds,3 came from the first batch and the remainder came from the second batch.
-Which of the following journal entries correctly records the Sales revenues?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 14,400 & \\
• \hline \text { Sales revenue } & & 14,400 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Sales revenue } & 14,400 & \\
• \hline \text { Inventory } & & 14,400 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 8,700 & \\
• \hline \text { Sales revenue } & & 8,700 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Inventory } & 8,700 & \\
• \hline \text { Sales revenue } & & 8,700 \\
• \hline
• \end{array}\]

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Definitions:

Parol Evidence

A legal rule that prohibits the introduction of outside evidence to add, modify, or contradict the terms of a written agreement.

Clerical Error

A minor mistake or omission made due to oversight or mishandling in documents, records, or transactions, typically seen as non-material and correctable.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to a second party if the second party has reasonably relied on that promise to their detriment.

Unenforceable

A term describing a contract or clause that, due to legal deficiencies, cannot be executed or enforced by law.