A Company That Uses the Perpetual Inventory System Sold Goods $$\begin{array} { | c | r | r | } \hline \text { Cost of Goods Sold } & 3,500 & \\\hline \text { Sales Revenue } & & 3,500 \\\hline\end{array}$$

question 65

Multiple Choice

A company that uses the perpetual inventory system sold goods to a customer for cash for $3,500.The cost of the goods sold was $600.Which of the following journal entries correctly records this transaction?

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Cost of Goods Sold } & 3,500 & \\
• \hline \text { Sales Revenue } & & 3,500 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Cash } & 3,500 & \\
• \hline \text { Sales Revenue } & & 3,500 \\
• \hline
• \end{array}\]
• \[\begin{array} { | c | r | r | }
• \hline \text { Cost of Goods Sold } & 600 & \\
• \hline \text { Merchandise Inventory } & & 600 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Receivable } & 3,500 & \\
• \hline \text { Cash } & & 3,500 \\
• \hline
• \end{array}\]
• \[\begin{array} { | c | r | r | }
• \hline \text { Cost of Goods Sold } & 600 & \\
• \hline \text { Merchandise Inventory } & & 600 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Merchandise Inventory } & 3,500 & \\
• \hline \text { Sales Revenue } & & 3,500 \\
• \hline
• \end{array}\]

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Definitions:

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price, often used by investors to gauge the cash flow from their investments.

Capital Gains Yield

Capital Gains Yield is the price appreciation on an investment, expressed as a percentage of the investment's initial cost.

Total Return

The overall gain or loss experienced on an investment over a specified period of time, including both capital gains and dividends.

Discount Rate

In discounted cash flow analysis, this interest rate is crucial for determining the present value of cash flows that are expected in the future.