A Company Using the Perpetual Inventory System Purchased Inventory Worth

question 96

Multiple Choice

A company using the perpetual inventory system purchased inventory worth $540,000 on account with credit terms of 2/15,n/45.Defective inventory of $40,000 was returned 2 days later,and the accounts were appropriately adjusted.If the company paid the invoice 20 days later,the journal entry to record the payment would be ________.

• A)$540,000 debit to Accounts Payable and $540,000 credit to Cash
• B)$500,000 debit to Accounts Payable and $500,000 credit to Cash
• C)$540,000 debit to Accounts Payable,$530,000 credit to Cash,and $10,000 credit to Merchandise Inventory
• D)$530,000 debit to Accounts Payable,$10,000 credit to Merchandise Inventory,and $500,000 credit to Cash

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Definitions:

Transformed

In biology, refers to the process of changing a cell's characteristics through genetic modification or in cell culture. Outside biology, it can imply a comprehensive change in appearance or condition.

Specificity

The ability of a test or procedure to correctly distinguish those without a disease or condition from those who have it, often referred to in the context of diagnostic testing.

Preferred pH

The optimal acidity or alkalinity level at which an enzyme, organism, or biochemical process functions most efficiently.

Particular Substrate

A specific substance or surface that an enzyme or other active molecule acts upon to facilitate a chemical reaction.