A Company That Uses the Perpetual Inventory System Purchases Inventory

question 71

Multiple Choice

A company that uses the perpetual inventory system purchases inventory for $60,000 on credit,with terms of 3/10,n/30.Which of the following is the journal entry to record the payment made within 3 days?

• A)a debit to Accounts payable for $60,000,a credit to Inventory for $1800 and a credit to Cash for $58,200
• B)a debit to Inventory for $1800,a debit to Accounts payable for $60,000 and a credit to Cash for $61,800
• C)a debit to Accounts payable for $58,200,a debit to Inventory for $1800 and a credit to Cash for $60,000
• D)a debit to Accounts payable for $61,800 ,a credit to Cash for $60,000 and a debit to Inventory for $1800

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Definitions:

Sustainability

Involves practices and strategies that meet present needs without compromising the ability of future generations to meet their needs, highlighting environmental, economic, and social dimensions.

Economic Results

The outcomes related to the financial performance and economic health of a business or economy, reflecting growth or challenges.

Profitability

Profitability is a financial metric indicating the degree to which a company or business activity yields profit, comparing revenue against expenses over a specific period.

Tier 2 Environmental Costs

The indirect costs associated with environmental impacts and resource use that are not directly tied to a company's operations, such as societal or external environmental costs.