A Firm That Uses the Perpetual Inventory Method Purchased $1,000

question 133

Multiple Choice

A firm that uses the perpetual inventory method purchased $1,000 of inventory on terms 2/10, n/30. The journal entry to record this transaction would include a debit to

• A) Purchases
• B) Purchase Discounts
• C) Inventory
• D) Accounts Payable

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Definitions:

Sales Revenues

The total amount of income generated by a company from its sales of goods or services, before any expenses are deducted.

Credit Sales

Transactions where goods or services are sold and payment is received at a later date.

Goods Transferred

The process of moving goods from one location to another, often referring to the change in ownership of inventory from seller to buyer.

Refund Liability

Refund Liability is an obligation arising from the potential need to repay customers for returned or unsatisfactory goods and services.