Juniper Company Uses a Perpetual Inventory System and the Gross

question 27

Multiple Choice

Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases.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.

---

Definitions:

Before Specialization

Refers to the economic state or condition prior to the allocation of resources towards the production of specific goods or services in which they have a comparative advantage.

Exchange

The act of trading goods, services, currencies, or other instruments of value between parties.

Families

Families denote groups of individuals related by blood, marriage, or adoption, often living together and providing emotional and economic support to one another.

Specialization Of Labor

The practice of dividing labor into specific, narrowly defined tasks to increase efficiency and productivity.