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:

Revolving Nosepiece

is a part of a microscope that holds multiple objective lenses and allows for easy switching between magnifications.

Small Lenses

Optical components designed to focus or diverge light, typically used in cameras, glasses, and scientific instruments.

PASS Method

Acronym for Pull, Aim, Squeeze, and Sweep, a technique used for effectively using a fire extinguisher.

Fire Extinguisher

A device that discharges a substance to put out a fire, often by cooling the fire, cutting off its oxygen supply, or both.