Company makes journal entries for current quarter Sold for 1

Company makes journal entries for current quarter: Sold for 100 dollars an inventory item on credit that cost the company 40 dollars. Company bought the same inventory items for $40 on credit in the previous quarter 1. A/R $100 Revenues $100 2. Inventory -$40 COGS-(+40) 3. Inventory $40 A/P $40. O True False

Solution

False,

there would be only first two journal entries in the current quarter because the last one was made in the previous quarter when inventory was purchased on credit.