A Company That Uses the Perpetual Inventory System Purchased Inventory

question 122

Multiple Choice

A company that uses the perpetual inventory system purchased inventory for $1,000,000 on account with terms of 4/7, n/20. Which of the following correctly records the payment made 15 days after the date of invoice?

---

Definitions:

Long-run Phillips Curve

A graphical representation suggesting that in the long run, there is no trade-off between inflation and unemployment, as the economy adjusts to natural levels of employment.

Labor Force

The total number of workers, including both the employed and the unemployed

Expected Inflation

The rate at which general prices of goods and services are anticipated to rise over a specific period.

Actual Inflation

The actual rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.