A Company That Uses the Perpetual Inventory Method Purchases Inventory

question 77

Multiple Choice

A company that uses the perpetual inventory method purchases inventory for $2,000 from a vendor on account,FOB shipping point,with terms of 2/10,n/30.The company paid the shipper $100 cash for freight in.
-The company then returned $200 of damaged goods and got an allowance from the vendor.The company paid the vendor 8 days after the sale.Assuming this was the only transaction affecting inventory,and that there was no beginning balance,what would the cost basis of the inventory be?

• A) $1,764
• B) $1,864
• C) $2,100
• D) $1,900

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Definitions:

Null

Typically refers to the null hypothesis in statistical analysis, which posits that there is no significant difference or relationship between specified populations, any observed difference being due to sampling or experimental error.

Assume

To accept something to be true without question or proof.

Research Hypothesis

A specific, testable prediction about the relationship between two or more variables that a researcher aims to investigate.

Purpose

The reason for which something is done or created or for which something exists.