Avery Supplies Uses a Periodic Inventory System B) C) D) $$\begin{array} { | l | r | r | } \hline \text { Accounts payable } & 400 & \\\hline \text { Cash } & & 400 \\\hline\end{array}$$

question 111

Multiple Choice

Avery Supplies uses a periodic inventory system.Avery purchased $10,000 of inventory on account.The terms were 3/10,n/30.The purchase was made on February 1.
-On February 2,Avery returned $400 of damaged goods to the supplier and was granted an allowance.How should Avery properly record the allowance?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts payable } & 400 & \\
• \hline \text { Purchase returns and allowances } & & 400 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts payable } & 9,600 & \\
• \hline \text { Purchase discounts } & 400 & \\
• \hline \text { Purchases } & & 10,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts payable } & 10,000 & \\
• \hline \text { Cash } & & 9,600 \\
• \hline \text { Purchase returns and allowances } & & 400 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts payable } & 400 & \\
• \hline \text { Cash } & & 400 \\
• \hline
• \end{array}\]

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