A Hotel Sold Four Cases of Wine at a Conference

A hotel sold four cases of wine at a conference function for $2,160 cash. The four cases cost the hotel $1,000. The set of accounting entries to record this transaction would include which of the following:

A) Credit wine revenue account $1,000; Debit cash $2,160.
B) Credit cost of goods sold $1,000; Debit cash $2,160.
C) Debit cost of goods sold $2,160; Credit cash $2,160.
D) Credit wine revenue account $2,160; Credit wine inventory $2,160.
E) Credit wine revenue account $2,160; Credit wine inventory account $1,000.

Correct Answer:

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