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:

Substantially Indistinguishable

Describes two or more items so similar in all important aspects that they cannot be clearly differentiated.

Trade Secret

Any practice, formula, process, design, instrument, pattern, or compilation of information not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers.

Patent

A legal document granting an inventor exclusive rights to produce, sell, and use an invention for a certain period of time.

Collective Marks

Trademarks or service marks used by members of a cooperative, association, or other collective group to indicate membership.