A Company That Uses the Perpetual Inventory Method Purchases Inventory

question 60

Multiple Choice

A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10,n/30.Defective inventory of $200 is returned 2 days later and the accounts are appropriately adjusted.If the company paid the vendor within 10 days,which of the following entries would be made to record the payment?

• A) $800 debit to Accounts payable and an $800 credit to Cash
• B) $784 debit to Accounts payable, a $16 debit to Inventory and an $800 credit to Cash
• C) $16 debit to Inventory, an $800 debit to Accounts payable and an $816 credit to Cash
• D) $800 debit to Accounts payable, a $16 credit to Inventory and a $784 credit to Cash

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Definitions:

Sexual Stimulation

Sexual stimulation involves any event or action that increases sexual arousal or desire in an individual.

Hedonic Adaptation

The observed tendency of individuals to return to a relative level of happiness despite major positive or negative events or life changes.

Income

The financial earnings received by an individual or group, typically calculated on a weekly, monthly, or yearly basis, from work, investments, or other sources.

Happiness

A state of well-being that encompasses living a good life, with a sense of meaning and deep satisfaction.