A Merchandiser Returned Inventory Worth $2,000 That Was Purchased on Account

question 129

Multiple Choice

A merchandiser returned inventory worth $2,000 that was purchased on account. Under the periodic inventory system, the journal entry to record such returns would include:

• A)a debit to Purchase Returns and Allowances for $2,000 and a credit to Accounts Payable for $2,000.
• B)a debit to Accounts Payable for $2,000 and a $2,000 credit to Purchase Returns and Allowances.
• C)a debit to Purchases for $2,000 and a credit to Accounts Payable for $2,000.
• D)a debit to Accounts Payable for $2,000 and a credit to Purchases for $2,000.

Analyze mutually exclusive projects to determine the most beneficial investment.

Apply the concept of cost of capital in project evaluation and financing decisions.

Understand the principles and calculations involved in capital budgeting including NPV, IRR, PI, and payback period.

Ability to rank projects based on profitability index and understanding its implications.

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