A Company That Uses the Perpetual Inventory System Sold Goods $$\begin{array} { | c | r | r | } \hline \text { Cost of Goods Sold } & 800 & \\\hline \text { Sales Revenue } & & 800 \\\hline\end{array}$$

question 22

Multiple Choice

A company that uses the perpetual inventory system sold goods for $2,400 to a customer on account.The company had purchased the inventory for $800.Which of the following journal entries correctly records the cost of goods sold?

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Cost of Goods Sold } & 800 & \\
• \hline \text { Sales Revenue } & & 800 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Merchandise Inventory } & 800 \\
• \hline \text { Cost of Goods Sold } & & 800 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Cost of Goods Sold } & 800 & \\
• \hline \text { Merchandise Inventory } & & 800 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Receivable } & 800 & \\
• \hline \text { Sales Revenue } & & 800 \\
• \hline
• \end{array}\]

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Definitions:

Retail Jewelry Store

A business establishment that specializes in selling jewelry and related accessories to the final consumer.

Vicarious Liability

A legal principle holding one party responsible for the actions of another, based on the relationship between the parties.

Negligent Hiring

A legal claim made against an employer when an employee causes harm, alleging the employer should have known the employee was a risk.

Employee

An individual who works part-time or full-time under a contract of employment, providing their services in exchange for compensation.