A Company Using a Perpetual Inventory System Made the Following

question 163

Multiple Choice

A company using a perpetual inventory system made the following entry: Debit Accounts Payable for $3,000,credit Inventory for $60,and credit Cash for $2,940.What does this entry reflect?

• A)A purchase of inventory at a discount.
• B)A return of inventory for credit.
• C)A sale of inventory on account.
• D)A payment within the discount period for inventory previously purchased on credit.

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Definitions:

Centralization

A process where decision-making authority is concentrated at a single point in the organization, often at the top management level.

Buying Specialization

A procurement approach where purchasing responsibilities are divided amongst team members based on specific categories of goods or services.

Purchasing Consortium

A group of companies or organizations that join together to pool their purchasing power, aiming to negotiate better terms and prices from suppliers.

Collaborative Purchasing

A strategy where multiple organizations come together to negotiate and buy products or services to achieve cost savings and other buying synergies.