A Company Using the Perpetual Inventory System Purchased Inventory Worth

question 121

Multiple Choice

A company using the perpetual inventory system purchased inventory worth $500,000 on account with terms of credit being 3/15,n/45.Defective inventory of $50,000 was returned 2 days later and the accounts were appropriately adjusted.If the company paid the invoice 25 days later,the journal entry to record the payment would be ________.

• A)$500,000 debit to Accounts Payable and $500,000 credit to Cash
• B)$450,000 debit to Accounts Payable and $450,000 credit to Cash
• C)$500,000 debit to Accounts Payable,$486,500 credit to Cash,and $13,500 credit to Inventory
• D)$486,500 debit to Accounts Payable,$13,500 credit to Inventory,and $450,000 credit to Cash

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Definitions:

Power Differential Heuristic

A cognitive short-cut used to quickly assess and respond to situations based on perceived imbalances in power or authority.

System-2 Thinking

A cognitive process that requires analytical and deliberate thought to solve complex problems or make decisions.

Reactive

Responding to events or stimuli rather than initiating or influencing them; often characterized by a lack of planning.

Holistic

Pertaining to an approach that considers all aspects of a situation, including physical, mental, and social factors, rather than focusing on individual parts.