A Company Purchased Inventory for $800 Per Unit

question 160

Multiple Choice

A company purchased inventory for $800 per unit. The company later sold the inventory for $1,000 per unit. The entries to record the sale for cash and cost of goods sold would include debits to which of the following accounts?

• A) Sales, $1,000; Inventory, $800
• B) Cash, $1,000; Cost of Goods Sold, $800
• C) Cash, $800; Cost of Goods Sold, $1,000
• D) Sales, $800; Inventory, $800

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Definitions:

Reciprocal Services

Services exchanged between departments within an organization or between businesses without involving monetary payment, aiming for mutual benefit.

Sequential

Occurring in a logical order or sequence, often referring to processes or steps that follow one after another.

Direct

Pertaining to costs or expenses that can be specifically traced to a cost object, such as a product, department, or project.

Joint Production

A manufacturing process where two or more products are produced simultaneously from the same raw materials or process.