Polk Company Uses a Perpetual Inventory System and Had the Following

question 134

Multiple Choice

Polk Company uses a perpetual inventory system and had the following transactions during November: November 6-Purchased $8,700 of inventory on account,terms 2/10,n/30.
November 8-Returned $1,200 of defective units and received full credit.
November 15-Paid the amount due.
What journal entry will be recorded by Polk Company on November 8?

• A)Debit Inventory and credit Cost of Goods Sold for $1,200.
• B)Debit Accounts Payable and credit Inventory for $1,200.
• C)Debit Inventory and credit Accounts Payable for $1,200.
• D)Debit Accounts Payable and credit Purchase Returns for $1,200.

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Definitions:

Conceptual Framework

A system of ideas and objectives that lead to the creation of a consistent set of rules and standards for financial accounting and reporting.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

Confirmatory Value

The usefulness of financial information in confirming or correcting prior expectations.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and government bodies.