A Company That Uses the Perpetual Inventory System Purchased Inventory

question 27

Multiple Choice

A company that uses the perpetual inventory system purchased inventory for $1,000,000 on account with terms of 4/7, n/20. Which of the following correctly records the payment made 15 days after the date of invoice?

• A) \(\begin{array}{l}
• \begin{array}{|c|c|c|}
• \hline\text { Cash }&1,000,000\\
• \hline \text { Accounts Payable } && 1,000,000\\
• \hline
• \end{array}
• \end{array}\)
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Payable } & 1,000,000 & \\
• \hline \text { Merchandise Inventory } & & 1,000,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Payable } & 1,000,000 & \\
• \hline \text { Cash } & & 1,000,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Accounts Payable } & 1,000,000 & \\
• \hline \text { Merchandise Inventory } & & 100,000 \\
• \hline \text { Cash } & & 900,000 \\
• \hline
• \end{array}\]

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Definitions:

Macrosociology

The level of analysis that studies large-scale social structures in order to determine how they affect the lives of groups and individuals.

Conflict Theory

A social theory that views social life as a competition and focuses on the distribution of resources, power, and inequality.

Symbolic Interactionism

A sociological perspective focusing on how individuals interpret and give meaning to social symbols, interactions, and experiences.

Means of Production

The facilities, resources, and tools used to produce goods and services, often discussed in the context of societal roles and class distinctions.