Question: Entity E uses a perpetual inventory system. On September 1, Entity E (buyer) purchased merchandise from Entity F for $70,000, terms 2/10, net 30. Unknown

Entity E uses a perpetual inventory system. On September 1, Entity E (buyer) purchased merchandise from Entity F for $70,000, terms 2/10, net 30. Unknown to Entity E, the merchandise cost Entity F $50,000. Entity Es entry to record this transaction is:

Dr. Accounts receivable 70,000 Cr. Sales 70,000

None of the above.

Dr. Accounts Receivable 70,000 Cr. Sales 70,000

Dr. Cost of goods sold 50,000 Cr. Inventory 50,000

Dr. Inventory 70,000 Cr. Accounts Payable 70,000

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