A Company Using the Perpetual Inventory System Purchased Inventory Worth

question 38

Multiple Choice

A company using the perpetual inventory system purchased inventory worth $500,000 on account with credit terms of 3/15,n/45.Defective inventory of $50,000 was returned 3 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 Merchandise Inventory
• D)$463,500 debit to Accounts Payable,$13,500 credit to Merchandise Inventory,and $450,000 credit to Cash

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Definitions:

Continental Association

An agreement adopted by the First Continental Congress in 1774 in response to the British Coercive Acts, implementing a trade boycott with Great Britain.

Committees of Observation

were bodies established by American colonists during the early stages of the Revolutionary War to enforce the boycott of British goods following the Townshend Acts and to spread the cause of liberty.

Revolutionary Tribunals

Courts established in revolutionary periods, especially noted during the French Revolution, to try enemies of the revolution swiftly and without the same procedural rights as regular courts.

Spy Networks

Organized groups of spies that collect intelligence and conduct espionage operations for governments, organizations, or military units.