A Company Using the Perpetual Inventory System Purchased Inventory Worth

question 119

Multiple Choice

A company using the perpetual inventory system purchased inventory worth $500,000 on account with terms of credit being 3/15, n/45. Defective inventory of $50,000 was returned 2 days later and the accounts were appropriately adjusted. If the company paid the invoice 25 days later, the journal entry to record the payment would be:

• A)$500,000 debit to Accounts Payable and $500,000 credit to Cash.
• B)$450,000 debit to Accounts Payable, $450,000 credit to Cash.
• C)$500,000 debit to Accounts Payable ,$486,500 credit to Cash and $13,500 credit to Inventory.
• D)$486,500 debit to Accounts Payable, $13,500 credit to Inventory and $450,000 credit to Cash.

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Definitions:

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Implicit Association Test (IAT)

A psychological assessment method that aims to reveal unconscious or hidden biases and attitudes by measuring the speed of associations between concepts.