A Firm That Uses the Perpetual Inventory Method Purchases Inventory

question 111

Multiple Choice

A firm that uses the perpetual inventory method purchases inventory of $1 000 on credit, including GST, with terms of 2/10, n/30. Which of the following entries would be made to record the payment if it is made within 10 days?

• A)$980 debit to Accounts payable, a $20 debit to Inventory and a $1 000 credit to Cash
• B)$18.18 debit to Inventory, a $1.82 debit to GST Clearing, a $1 000 debit to Accounts payable and a $1 020 credit to Cash
• C)$1 000 debit to Accounts payable and a $1 000 credit to Cash
• D)$1 000 debit to Accounts payable, a $18.18 credit to Inventory, a $1.82 credit to GST Clearing and a $980 credit to Cash

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Definitions:

False Dichotomy

A logical fallacy in which only two choices are presented when in fact more options exist.

Overly Simplified Question

A question that reduces complex issues or subjects to overly basic terms, potentially oversimplifying nuances or complexities.

Affectively Worded Question

is a question designed to elicit an emotional response, often to gauge feelings or sentiments towards a subject.