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:

Motivational Principle

A fundamental rule or belief guiding the strategies to encourage individuals to perform and achieve goals.

Performance

The process of executing or completing an action, task, or function.

Motivational Patterns

The various ways in which individuals are driven to achieve goals, satisfy needs, or pursue desires.

Motivating Employees

The process of encouraging employees to perform their best through incentives, rewards, and creating a positive work environment.