Queen Mattresses,Inc If Queen Mattresses,Inc $\begin{array}{lll}\text { Accounts Payable } & 1,000 & \\\quad \text { Inventory } & & 1,000 \\\end{array}$

question 9

Multiple Choice

Queen Mattresses,Inc.had the following transactions occur during May 20X3.Assume there is no beginning inventory. $\begin{array}{ll}\text { May } 2 & \text { Inventory was purchased on account for } \$ 5,000 \text {, terms } 2 / 10, n / 30 . \\\text { May } 3 & \text { Inventory costing } \$ 1,000 \text { was returned. } \\\text { May } 9 & \text { Paid for the inventory. } \\\text { May 15 } & \text { Inventory costing } \$ 2,200 \text { was sold on account for } \$ 3,800 \text {, terms } 3 / 10, n / 45 \text {, } \\\text { May } 31 & \text { Closing entries are prepared for the month-end financial statements. }\end{array}$ If Queen Mattresses,Inc.were using the periodic inventory system,what is the journal entry on May 3?

• A)\(\begin{array}{lll}
• \text { Accounts Payable } & 1,000 & \\
• \quad \text { Inventory } & & 1,000 \\
• \end{array}\)
• B)\(\begin{array}{lccc}
• \text { Accounts Payable } & 1,000 \\
• \quad \text { Purchases } & &1,000 \\
• \end{array}\)
• C)\(\begin{array}{lccc}
• \text { Accounts Payable } & 1,000 \\
• \quad \text { Purchase Returns and Allowances } & &1,000 \\
• \end{array}\)
• D)\(\begin{array}{lccc}
• \text { Accounts Payable } &1,000 & \\
• \quad \text { Cash Discounts on Purchases } & & 20 \\
• \quad \text { Inventory } & & 980\\
• \end{array}\)
• E)\(\begin{array}{lccc}
• \text { Accounts Payable } & 1,000\\
• \quad \text { Cash Discounts on Purchases } & & 20 \\
• \text { Purchases } & & 980\\
• \end{array}\)

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Definitions:

Output

The total quantity of goods and services produced by an economy or a firm.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the quantity of output produced, a measure of per unit cost.

Marginal Cost

The cost of producing one additional unit of a good or service, which can vary depending on the level of production.

Average Variable Cost

The total variable cost divided by the quantity of output, representing the variable cost per unit of output.