Olivieri Company Uses the Perpetual Inventory Method

question 18

Multiple Choice

Olivieri Company uses the perpetual inventory method.On January 5,Olivieri sold merchandise to Sulo Inc.for $10,000 under credit terms of 2/10,n/30,FOB destination.The merchandise had cost $7,500.How would the company record this transaction?

• A)Debit Accounts Receivable for $10,000,credit Sales for $10,000,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500.
• B)Debit Cash for $10,000,credit Sales for $10,000,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500.
• C)Debit Accounts Receivable for $10,000 and credit Sales for $10,000.
• D)Debit Accounts Receivable for $10,000,debit Cost of Goods Sold for $7,500,and credit Gross Margin for $7,500.
• E)Debit Accounts Receivable for $9,800,credit Sales for $9,800,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500.

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Definitions:

Randall Collins

Randall Collins is a sociologist known for his contributions to sociological theory, particularly in the areas of interaction ritual chains and conflict theory.

Tracking

The placement of students in educational “tracks,” or programs of study (e.g., college prep, remedial), that determine the types of classes they take.

Tested

A process or procedure carried out to assess the quality, performance, or reliability of a product or concept.

Remedial

Intended to correct or improve one's skill in a specific field or subject, often used in the context of education to describe classes or activities designed to bring students up to the standard level of understanding.