A Company That Uses the Perpetual Inventory System Purchases Inventory

question 257

Multiple Choice

A company that uses the perpetual inventory system purchases inventory for $64,000 on account,with terms of 2/10,n/30.Which of the following is the journal entry to record the payment made within 10 days?

• A) a debit to Accounts Payable for $64,000, a credit to Cash for $1,280, and a credit to Merchandise Inventory for $62,720
• B) a debit to Accounts Payable for $64,000, a credit to Merchandise Inventory for $1,280, and a credit to Cash for $62,720
• C) a debit to Merchandise Inventory for $1,280, a debit to Accounts Payable for $64,000, and a credit to Cash for $65,280
• D) a debit to Accounts Payable for $62,720, a debit to Merchandise Inventory for $1,280, and a credit to Cash for $64,000

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Definitions:

Total Productive Maintenance

A proactive maintenance approach focusing on maximizing equipment effectiveness through the participation of all employees.

Employee Empowerment

A management strategy that gives employees autonomy, authority, and the capacity to make decisions affecting their work.

Deteriorated Customer Relations

A decline in the quality of interactions and satisfaction of customers with a company's products or services, potentially affecting loyalty and revenues.

Lost Sales

Lost Sales refer to potential revenue that was not earned due to stockouts, uncompetitive offerings, or other factors that prevented a transaction with a willing buyer.