An Electronics Retailer Purchases $20,000 of Computers for Resale

question 55

Multiple Choice

An electronics retailer purchases $20,000 of computers for resale.The retailer spends $500 in cash for transportation cost.Under a perpetual inventory system the journal entry to record the purchase will include:

• A)$20,500 will be debited to Inventory,$20,000 will be credited to Accounts Payable,and $500 will be credited to Cash.
• B)$20,000 will be debited to Inventory and $20,000 will be credited to Cash.
• C)$20,000 will be credited to Inventory and $20,000 will be credited to Purchases.
• D)$20,500 will be debited to costs of goods sold and $20,500 will be credited to Accounts Payable.

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Definitions:

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