A Company Uses the Perpetual Inventory System and Recorded the Following

question 107

Multiple Choice

A company uses the perpetual inventory system and recorded the following entry:
$$\begin{array} { | l | r | r | } \hline \text { Accounts Payable } & 2,500 & \\\hline \text { Merchandise Inventory } & & 50 \\\hline \text { Cash } & & 2,450 \\\hline\end{array}$$
This entry reflects a:

• A)Purchase
• B)Return
• C)Sale
• D)Payment of the account payable and recognition of a cash discount taken
• E)Purchase and recognition of a cash discount taken

---

Definitions:

Height

A measurement of an individual or object from base to top or head to foot, commonly used in various contexts to determine vertical length.

Inches

A unit of length in the Imperial and United States customary systems, equivalent to 1/12th of a foot or 2.54 centimeters.

Pounds

Pounds are a unit of weight measurement in the imperial system, equivalent to 0.453592 kilograms.

Least Squares Line

A regression line determined by minimizing the sum of the squares of the differences between observed and predicted values.