Olivieri Company Uses the Perpetual Inventory Method

Multiple Choice

Olivieri Company uses the perpetual inventory method.On January 5,Olivieri sold merchandise to Sulo Inc.for $10,000 under credit terms of 2/10,n/30,FOB destination.The merchandise had cost $7,500.How would the company record this transaction?

A) Debit Accounts Receivable for $10,000,credit Sales for $10,000,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500.
B) Debit Cash for $10,000,credit Sales for $10,000,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500.
C) Debit Accounts Receivable for $10,000 and credit Sales for $10,000.
D) Debit Accounts Receivable for $10,000,debit Cost of Goods Sold for $7,500,and credit Gross Margin for $7,500.
E) Debit Accounts Receivable for $9,800,credit Sales for $9,800,debit Cost of Goods Sold for $7,500,and credit Merchandise Inventory for $7,500.