When Using a Perpetual Inventory System, Why Are Discounts Credited

question 181

Multiple Choice

When using a perpetual inventory system, why are discounts credited to Inventory?

• A)The discounts are debited to discount expense and thus the credit has to be made to merchandise inventory.
• B)The discounts reduce the cost of the inventory.
• C)The discounts are a reduction of business expenses.
• D)None of these answers choices are correct.

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Definitions:

Margin of Error

An expression of the amount of random sampling error in survey results.

Population Mean

The population mean is the average value of all the items in a population.

Population Proportion

The ratio of members in a group to the total population who have a particular characteristic.

Registered Voters

Individuals who have completed the necessary procedures to be eligible to vote in an election.