18) Davis Hardware Company uses a periodic inventory system. How should Davis record the sale of inventory costing $620 for $960 on account?

1. Cost of Goods Sold 620

Purchases 620

Accounts Receivable 960

Sales Revenue 960

2. Accounts Receivable 960

Sales Revenue 960

3. Purchases 620

Gain 340

Sales Revenue 960

4. Accounts Receivable 960

Sales Revenue 620

Gain 340

A) Option 1

B) Option 2

C) Option 3

D) Option 4