A Company That Uses the Perpetual Inventory Method Purchases Inventory

question 123

Multiple Choice

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10,n/30.Which of the following entries would be made to record the payment if it is made 20 days later?

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

---

Definitions:

Arouse Interest

The step in marketing or communication where the audience's curiosity or attention towards a product or message is generated.

Hall Of Fans Sweepstakes

A promotional contest or lottery, often associated with sports or entertainment, where fans can win prizes or recognition.

Sales Promotion

Marketing activities and incentives designed to increase consumer purchasing and stimulate product demand, often through discounts, coupons, or bonuses.

PBR World Finals

An annual championship event in professional bull riding, showcasing the top athletes and bulls in the sport.