Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a company that uses the perpetual inventory system

A company that uses the perpetual inventory system sold goods to a customer on account...

90.2K

Verified Solution

Question

Accounting

A company that uses the perpetual inventory system sold goods to a customer on account on May 7 for $105. The company has the following inventory information:
May 1
Beginning Inventory
8 units at $4 each
May 4
Purchase
10 units at $5 each
May 7
Sale
15 units
The company uses the FIFO method of inventory costing. Which of the following journal entries correctly records the sale on May 7?
A. Sales Revenue
\table[[105,105],[70,70]]
B. Accounts Receivable
105
Sales Revenue
Cost of Goods Sold
Merchandise Inventory
C. Sales Revenue
105
Accounts Receivable
Cost of Goods Sold
67
Merchandise Inventory
D. Accounts Receivable
105
Sales Revenue
67
105
Cost of Goods Sold
Merchandise Inventory
70
dots
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students