Spears Company Uses the Periodic Inventory Method

question 40

Multiple Choice

Spears Company uses the periodic inventory method.On April 15,Spears Company purchased merchandise inventory from Zing Inc.with an invoice price of $70,000 and credit terms of 2/10,n/30.How would Spears Company record this transaction?

• A)Debit Merchandise Inventory for $70,000 and credit Cash for $70,000.
• B)Debit Merchandise Inventory for $70,000 and credit Accounts Payable for $70,000.
• C)Debit Merchandise Inventory for $68,600 and credit Accounts Payable for $68,600.
• D)Debit Purchases for $70,000 and credit Accounts Payable for $70,000.
• E)Debit Purchases for $68,600 and credit Accounts Payable for $68,600.

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Definitions:

Rotates

To move or turn around a central point or axis.

Below The Elbow

Referring to the part of the arm or to treatments and prosthetics that are applied to the forearm and hand, distal to the elbow joint.

Abbreviation

A slimmed-down version of a word or phrase.

Adducts

Muscles that move a limb or other body part toward the midline of the body.