A Company Uses the Periodic Inventory Method

question 94

Multiple Choice

A company uses the periodic inventory method.Which of the following entries would be made to record a $1,200 purchase of inventory on account?

• A) The accounting entry would be a $1,200 debit to Purchases and a $1,200 credit to Accounts payable.
• B) The accounting entry would be a $1,200 debit to Accounts payable and a $1,200 credit to Purchases.
• C) The accounting entry would be a $1,200 debit to Inventory and a $1,200 credit to Accounts payable.
• D) The accounting entry would be a $1,200 debit to Accounts payable and a $1,200 credit to Inventory.

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Definitions:

Compliance

A change in behavior in response to a request.

Dissonance Theory

A theory proposed by Leon Festinger that suggests that inconsistency among beliefs or behaviors causes psychological discomfort (dissonance), leading to efforts to reduce the dissonance.

Innocence

symbolizes the state of being free from guilt or moral wrong, typically attributed to children or in legal contexts where an individual is found not guilty of a crime.

Compliance

The act of conforming, submitting, or adapting one's behavior to align with the demands or requests of others.