Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of merchandise, costing $720, and sold on account for $1,160? Multiple Choice 220 Inventory Accounts receivable Sales Sales revenue 720 1,160 1,160 Inventory Gain on sale Sales revenue 720 440 1,160 1,160 Accounts receivable Sales revenue Gain on sale 720 440 1,160 Accounts receivable Sales revenue Cost of goods sold Inventory 1,160 720 720 The accounting equation can be stated as: Multiple Choice A-L + OE = 0. I s A-L-OE = 0. A+L-OE = 0. LO -A +L-OE = 0. When Castle Corporation pays insurance premiums, the transaction is recorded as a debit to prepaid insurance. Additional information for the year ended December 31 is as follows: Prepaid insurance at January 1 Insurance expense recognized during the year Prepaid insurance at December 31 $52,500 218,150 61,450 What was the total amount of cash bale by Caste for insurance premiups during the year? 5 Multiple Choice $227300 $218.50 $165,650 $209 200 ME w Incurring an expense for advertising on account would be recorded by: Multiple Choice Debiting an expense. ces Crediting assets Debiting liabilities Debiting assets raw II