Avery Supplies Uses a Periodic Inventory System B) C) D) $$\begin{array} { | c | r | r | } \hline \text { Accounts Payable } & 400 & \\\hline \text { Cash } & & 400 \\\hline\end{array}$$

question 54

Multiple Choice

Avery Supplies uses a periodic inventory system. Avery purchased $10,000 of inventory on account. The terms were 3/10, n/30. The purchase was made on February 1. On February 2, Avery returned $400 of damaged goods to the supplier and was granted an allowance. How should Avery properly record the allowance?

• A) \[\begin{array} { | r | r | r | }
• \hline \text { Accounts Payable } & 400 & \\
• \hline \text { Purchase Returns and Allowances } & & 400 \\
• \hline
• \end{array}\]
• B) \(\begin{array}{|l|l|cc|}
• \hline \text {Accounts Payable \quad\quad\quad\quad } & \text { \quad\quad9,600 } & \text { }\\
• \hline \text { Purchase Discounts } & \text {\quad\quad\quad\quad400 } & \text { }\\
• \hline \text { Purchases } & \text { } & \text { \quad\quad\quad10,000 }\\
• \hline
• \end{array}\)
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Payable } & 10,000 & \\
• \hline \text { Cash } & & 9,600 \\
• \hline \text { Purchase Returns and Allowances } & & 400 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Payable } & 400 & \\
• \hline \text { Cash } & & 400 \\
• \hline
• \end{array}\]

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