Dawn Company Uses a Perpetual Inventory System Made a Purchase $\begin{array}{lrr} \text {Accounts Payable } &7,000\\ \text { Cash } &&7,000\\\end{array}$

question 210

Short Answer

Dawn Company uses a perpetual inventory system made a purchase of merchandise on credit from Wagne Corporation on August 3 for $7000 terms 2/10 n/45. On August 10 Dawn makes the appropriate payment to Wagne. The entry on August 10 for Dawn Company is a.
$\begin{array}{lrr} \text {Accounts Payable } &7,000\\ \text { Cash } &&7,000\\\end{array}$

b.
$\begin{array}{lrr} \text { Accounts Payable } &6,860\\ \text { Cash } &&6,860\end{array}$

c.
$\begin{array}{lrr} \text {Accounts Payable } &7,000\\ \text { Purchase Returns and Allowances } &&140\\ \text {Cash } &&6,860\end{array}$

d.
$\begin{array}{lrr} \text { Accounts Payable} &7,000\\ \text { Inventory } &&140\\ \text { Cash} &&6,860\end{array}$

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Definitions:

Forecast Error

The difference between actual demand and forecasted demand, indicative of the accuracy of demand forecasting efforts.

Marketing and Sales Strategy

The comprehensive plan comprising tactics and methods used by a business to promote, sell, and distribute its products or services.

Strategic Fit

The alignment between an organization's strategy and its external environment, as well as its internal resources and capabilities.

Responsiveness Spectrum

(new definition) Refers to the continuum of adaptability levels a company can exhibit, from highly reactive to changes in the market to relatively unresponsive.