Carlton Company Uses the Perpetual Inventory Method

question 70

Multiple Choice

Carlton Company uses the perpetual inventory method.On April 15,Carlton Company purchased merchandise inventory from Dixie Inc.with an invoice price of $70,000 and credit terms of 2/10,n/30.How would Carlton 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:

Adams-Onís Treaty

An 1819 agreement between the United States and Spain that ceded Florida to the U.S. and defined the boundary between the U.S. and New Spain.

Louisiana Purchase

The Louisiana Purchase was a land deal between the United States and France in 1803, wherein the U.S. acquired approximately 827,000 square miles of land west of the Mississippi River.

49th Parallel

denotes the approximate boundary line between the United States and Canada, established in parts by the Oregon Treaty of 1846.

Missouri Admission

The process that led to Missouri becoming the 24th state of the United States in 1821, marked by debates over the extension of slavery into new territories.