Paoli Pizza Bought $5,000 Worth of Merchandise from TechCom and Signed

question 55

Multiple Choice

Paoli Pizza bought $5,000 worth of merchandise from TechCom and signed a 90-day,10% promissory note for the $5,000.TechCom's journal entry to record the sales portion of the transaction is:

• A) \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Receivable } & 5,000 & \\
• \hline \text { Sales } & & 5,000 \\
• \hline
• \end{array}\)
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Notes Receivable } & 5,000 & \\
• \hline \text { Sales } & & 5,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts Receivable } & 5,125 & \\
• \hline \text { Sales } & & 5,125 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Notes Receivable } & 5,125 & \\
• \hline \text { Sales } & & 5,125 \\
• \hline
• \end{array}\]
• E) \[\begin{array} { | l | r | r | }
• \hline \text { Notes Receivable } & 5,000 & \\
• \hline \text { Interest Receivable } & 125 & \\
• \hline \text { Sales } & & 5,125 \\
• \hline
• \end{array}\]

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Definitions:

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered but not yet paid for.

Perpetual Inventory System

An accounting method that records inventory transactions in real-time, providing a continuous account of inventory levels.