The Entries to Record Cost and Sale of a Finished

question 21

Multiple Choice

The entries to record cost and sale of a finished good on account is:

• A) debit Cost of Goods Sold, credit Finished Goods
• B) debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales
• C) debit Sales Expense, credit Finished Goods, credit Cash, credit Accounts Receivable
• D) debit Work in Process, credit Finished Goods, debit Accounts Receivable, credit Sales

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Definitions:

Sold

The completed transaction of exchanging a good or service for money or other compensation.

Reservation Price

The absolute highest price that a buyer is prepared to pay for a product or service.

English Auction

A type of auction in which prices start low and bid up by participants until no higher bids are offered.

Willingness To Pay

The maximum amount an individual is prepared to spend to acquire a good or service or avoid something undesirable.