Iowa Cattle Company Uses a Perpetual Inventory System

question 95

Multiple Choice

Iowa Cattle Company uses a perpetual inventory system.Iowa purchased cattle from Big D Ranch at a cost of $19,500,payable at time of delivery.The entry to record the delivery would be

• A) Purchases ...........................19,500
• Accounts Payable ..................19,500
• B) Inventory ...........................19,500
• Accounts Payable ..................19,500
• C) Purchases ...........................19,500
• Cash ..............................19,500
• D) Inventory ...........................19,500
• Cash ..............................19,500

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Definitions:

Profits

The financial gain obtained after subtracting expenses from revenue.

Patent

A government-granted exclusive right to an inventor, allowing them to prevent others from making, using, or selling their invention for a certain period.

Takeover Bid

In corporate law, the offer to buy the voting stock of a corporation.