A Company Using the Perpetual Inventory System Purchased Inventory Worth

question 189

Multiple Choice

A company using the perpetual inventory system purchased inventory worth $25,000 on account with terms of 3/10,n/30.Defective inventory of $1,000 was returned two days later,and the accounts were appropriately adjusted.If the invoice is paid 10 days after the invoice date,the amount of the purchase discount that would be available to the company is ________.

• A)$720
• B)$780
• C)$750
• D)$740

---

Definitions:

MPC

The marginal propensity to consume, which measures the portion of additional income that an individual spends on consumption instead of saving.

Multiplier

In macroeconomics, a factor that quantifies the effect of an initial change in the economy (such as investment or spending) on the total level of economic activity.

Automatic Stabilizers

Economic policies and programs designed to offset fluctuations in a nation's economic activity without additional government action.

Transfer Payments

Payments made by the government to individuals or groups without receiving any goods or services in return, such as social security or welfare benefits.