• A company sells goods for cash at a selling price of $700. The cost of the goods is $400. The journal entries to record the sale will include:

  1) An increase in inventory by $700, and a decrease in cash by $700. 

  2) An increase in cost of goods sold by $700, and a decrease in inventory by $700. 

  3) A decrease in inventory by $400, and an increase in sales revenue by $400.

  4) An increase in cash by $700, and an increase in sales revenue by $700.