Juniper Company Uses a Perpetual Inventory System

question 39

Multiple Choice

Juniper Company uses a perpetual inventory system.The company purchased $9,750 of merchandise on August 7 with terms 1/10,n/30.On August 11,it returned $1,500 worth of merchandise.On August 16,it paid the full amount due.The correct journal entry to record the purchase on August 7 is:

• A)Debit Merchandise Inventory $9,750;credit Cash $9,750.
• B)Debit Accounts Payable $9,750;credit Merchandise Inventory $9,750.
• C)Debit Merchandise Inventory $9,750;credit Sales Returns $1,500;credit Cash $8,250.
• D)Debit Merchandise Inventory $9,750;credit Accounts Payable $9,750.
• E)Debit Accounts Payable $8,250;debit Purchase Returns $1,500;credit Merchandise Inventory $9,750.

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Definitions:

Balance-of-Economic Transactions

A record of all economic transactions between residents of a country and the rest of the world during a particular period, including trade, investments, and financial transfers.

Bretton Woods Agreement

The Bretton Woods Agreement was established in 1944 to set up a new international monetary system, creating exchange rate stability and promoting international economic cooperation.

Exchange Rates

The value of one currency expressed in terms of another currency, which determines how much foreign currency can be exchanged for a unit of domestic currency.

Gold Convertibility

The ability to convert a currency directly into gold, a system which provides a measure of security and confidence in a currency's value.