Morgan,Inc B) C) $$\begin{array} { | l | r | l | } \hline \text { Purchases } & 15,000 & \\\hline \text { Accounts Payable } & & 15,000 \\\hline\end{array}$$

question 140

Multiple Choice

Morgan,Inc.uses a perpetual inventory system and the net method of recording purchases.On May 12,a merchandise purchase of $15,000 was made on credit,2/10,n/30.The journal entry to record this purchase is:

• A) \[\begin{array} { | l | r | l | }
• \hline \text { Merchandise Inventory } & 15,000 & \\
• \hline \text { Accounts Payable } & & 15,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | l | }
• \hline \text { Accounts Payable } & 15,000 & \\
• \hline \text { Merchandise Inventory } & & 15,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | l | }
• \hline \text { Purchases } & 15,000 & \\
• \hline \text { Accounts Payable } & & 15,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | l | }
• \hline \text { Purchases } & 14,700 & \\
• \hline \text { Accounts Payable } & & 14,700 \\
• \hline
• \end{array}\]
• E) \[\begin{array} { | l | r | l | }
• \hline \text { Merchandise Inventory } & 14,700 & \\
• \hline \text { Accounts Payable } & & 14,700 \\
• \hline
• \end{array}\]

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The risk that a company's cash flow, foreign investments, or earnings may suffer as a result of fluctuating exchange rates.

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