Embark Produces Mulch for Landscaping Use

question 168

Multiple Choice

Embark produces mulch for landscaping use. The following information summarizes production operations and sales activities for June. The journal entry to record June sales is:

• A) Debit Accounts Receivable $810,000; credit Cost of Goods Sold $810,000.
• B) Debit Accounts Receivable $810,000; credit Sales $366,000; credit Finished Goods Inventory $444,000.
• C) Debit Cost of Goods Sold $444,000; credit Sales $444,000.
• D) Debit Finished Goods Inventory $444,000; debit Sales $810,000; credit Accounts Receivable $810,000; credit Cost of Goods Sold $444,000.
• E) Debit Accounts Receivable $810,000; credit Sales $810,000; debit Cost of Goods Sold $444,000; credit Finished Goods Inventory $444,000.

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Definitions:

Investor and Creditor Risk

The level of uncertainty faced by investors and creditors due to the possibility of a company failing to meet its financial obligations.

High Ratio

A term that may refer to a financial ratio that is significantly above the industry average, indicating a particular aspect of a company's financial health, performance, or risk level.

Retired

Pertains to assets that have been removed from operational use, often due to age or obsolescence.

Unamortized Premium

The portion of a bond premium that has not yet been amortized or expensed over the bond's life, reflecting the difference between the bond's face value and its higher purchase price.