During May,Team Shirts spent $4,000 to buy 800 T-shirts and sold 300 of them for $15 each.Team Shirts should recognize ________ as expense for May.

Question

Quizplus · Accepted Answer

The cost of goods sold (COGS) for the 300 T-shirts sold is 300 x (4000/800) = $1,500. This should be recognized as an expense for May. The other choices do not accurately reflect the expenses for May. Option A includes the COGS and the revenue from selling the T-shirts, which would result in a profit rather than an expense. Option C includes the total cost of the T-shirts without taking into account the revenue from selling them. Option D includes only the cost of the T-shirts without considering any other expenses for the month.

During May,Team Shirts Spent $4,000 to Buy 800 T-Shirts and Sold