On June 1, Addison Company Purchased $9,000 of Inventory on Account

question 133

Multiple Choice

On June 1, Addison Company purchased $9,000 of inventory on account from Garrison Company. Garrison offers a 5% discount if payment is received within 15 days. Addison records the purchase using the gross method and the perpetual inventory system. The journal entry on June 1 by Addison Company includes ________.

• A) a debit to Inventory for $8,550
• B) a credit to Accounts Payable for $8,550
• C) a debit to Inventory for $9,000
• D) a credit to Cash for $9,000

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Definitions:

Formal Authority

The power granted to an individual or organization based on established laws, rules, or positions, enabling them to enforce rules and make decisions.

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A hierarchical position in armed forces determining authority, duties, and status.

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Verbal Insult

An offensive or disrespectful remark or statement directed towards someone.