Which of the Following Scenarios Could Explain the Journal Entry

question 58

Multiple Choice

Which of the following scenarios could explain the journal entry below? $$\begin{array} { | l | l | r | r | } \hline d r & \text { Cash } & 4,000 & \\\hline d r & \text { Notes Receivuble } & 6,000 & \\\hline & c r \text { Equipment } & & 10,000 \\\hline\end{array}$$

• A)The company buys $10,000 of equipment for $4,000 in cash and $6,000 on credit.
• B)The company pays $4,000 in cash and $6,000 in notes payable to buy $10,000 of equipment.
• C)The company sells $10,000 of equipment,for $4,000 in cash and $6,000 on credit.
• D)The company sells $10,000 of equipment,for $4,000 in cash and pays off $6,000 it owes on the equipment.

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Definitions:

Gross Margin

The difference between sales revenue and the cost of goods sold, representing the profit margin before overhead expenses.

Gross Margin

The financial metric representing the difference between sales revenue and the cost of goods sold (COGS), expressed as a percentage of sales revenue.

Cost of Goods Manufactured

Refers to the total production cost incurred by a company to manufacture products in a given period, including raw materials, labor, and overhead costs.

Sales

Sales refer to the total revenue earned from goods or services sold by a company during a specific period.