Tangent Corporation Sold a Product for $7,150 to Michael on Credit

question 32

Multiple Choice

Tangent Corporation sold a product for $7,150 to Michael on credit. The cost of goods sold is $5,650.Assuming that the firm is following a perpetual inventory system and using a sales journal, it will record $5,650 in the:

• A)Accounts Receivable DR, Sales Revenue CR column.
• B)Cost of Goods Sold DR, Merchandise Inventory CR column.
• C)Merchandise Inventory DR, Cost of Goods Sold CR column.
• D)Sales Revenue DR, Accounts Receivable CR column.

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Definitions:

Operating Income

A measure of a company's profitability that excludes non-operating income and expenses, focusing on core business activities.

Fixed Costs

Expenses that remain constant regardless of the business's production or sales activity, including insurance and lease payments.

Variable Cost

Expenses that vary directly with the production output, including costs of raw materials and direct labor.

Selling Price

The amount of money for which a product or service is sold to customers.