Cumberland Co

question 190

Multiple Choice

Cumberland Co. sells $2,000 of inventory to Hancock Co. for cash. Cumberland paid $1,250 for the merchandise. Under a perpetual inventory system, which of the following journal entry(ies) would be recorded?

• A) Cash $2,000 Dr, Merchandise Inventory $1,250 Cr
• B) Cash $2,000 Dr, Sales $2,000 Cr, and Cost of Merchandise Sold $1,250 Dr, Merchandise Inventory $1,250 Cr.
• C) Cash $1,250 Dr, Sales $1,250 Cr
• D) Accounts Receivable $2,000 Dr, Sales $2,000 Cr, and Cost of Merchandise Sold $1,250 Dr, Merchandise Inventory $1,250 Cr.

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Definitions:

Level Switch

A device used to detect the level of liquid or solid materials within a container or environment, triggering an action when a certain level is reached.

Temperature Switch

A device that activates or deactivates based on a specific temperature threshold being reached.

Proximity Sensor

A device that detects the presence or absence of a nearby object without physical contact, often using electromagnetic fields, light, or sound.

Photoelectric Sensor

A device that uses light to detect the presence, absence, or distance of an object.