Assume a Perpetual Inventory System

question 82

Multiple Choice

Assume a perpetual inventory system. A purchase on credit for $1 650 including 10% GST would be recorded in the purchases journal as:

• A)debit to inventory $1 500, debit to GST clearing account $150, credit to accounts payable $1 650.
• B)debit to inventory $1 500, credit to accounts payable $1 500.
• C)debit to inventory $1 650, credit to GST clearing account $150, credit to accounts payable $1 500.
• D)none of the above

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Definitions:

Targeted Stock Repurchase

A tactic used by corporations to buy back shares from specific shareholders, often to avert a takeover bid or reduce share dilution.

Unfriendly Takeover

An acquisition attempt by a company or individual that is not welcomed or approved by the target company's board of directors.

Horizontal Diversification

A strategy used by companies to increase their product lines or enter into new markets to reduce risk and increase growth opportunities.