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) \[\begin{array} { | l | r | r | }
• \hline \text { Inventory } & 8,700 & \\
• \hline \text { Sales revenue } & & 8,700 \\
• \hline
• \end{array}\]

Analyze and journalize business transactions and understand their effect on the accounting equation.

Compare and contrast accounting conventions and practices under GAAP and IFRS.

Understand the principles of double-entry accounting and the normal balance for various types of accounts.

Identify and apply the correct process for posting journal entries.

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