Campagna Company Uses the Periodic Inventory Method

question 154

Multiple Choice

Campagna Company uses the periodic inventory method.On January 5,Campagna sold merchandise to Kolb Inc.for $1,000 under credit terms of 2/10,n/30,FOB destination.The merchandise had cost $750.How would the company record this transaction?

• A)Debit Accounts Receivable for $1,000,credit Sales for $1,000,debit Cost of Goods Sold for $750,and credit Merchandise Inventory for $750.
• B)Debit Cash for $1,000,credit Sales for $1,000,debit Cost of Goods Sold for $750,and credit Merchandise Inventory for $750.
• C)Debit Accounts Receivable for $1,000 and credit Sales for $1,000.
• D)Debit Accounts Receivable for $1,000,debit Cost of Goods Sold for $750,and credit Gross Margin for $750.
• E)Debit Accounts Receivable for $980,credit Sales for $980,debit Cost of Goods Sold for $750,and credit Merchandise Inventory for $750.

Gain skills in effective note-taking and summarization without altering the intended meaning.

Distinguish between different survey methodologies and their cost-effectiveness.

Comprehend the correct use and purpose of footnotes and in-text citations in academic writing.

Ability to format and organize a bibliography correctly.

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Definitions:

Income Taxes

Taxes imposed by the government on the income earned by individuals and businesses within its jurisdiction.

Debt-To-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

Liquidity Ratios

Ratios that measure a company’s ability to meet its currently maturing obligations.

Operating Cycle

The average period of time required for a business to make an initial outlay of cash to produce goods or services, sell them, and receive cash back from customers.