Juniper Company, Inc

question 255

Multiple Choice

Juniper Company, Inc. uses the gross method of recording purchases and a perpetual inventory system. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The correct journal entry to record the payment on August 16 is:

• A)Debit Accounts Payable $8,250; credit Cash $8,250.
• B)Debit Cash $8,250; credit Accounts Payable $8,250.
• C)Debit Accounts Payable $8,250; credit Merchandise Inventory $82.50; credit Cash $8,167.50.
• D)Debit Accounts Payable $9,750; credit Merchandise Inventory $97.50; credit Cash $9,652.50.
• E)Debit Accounts Payable $9,652.50; credit Cash $9,652.50.

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Definitions:

Personally Liable

Being directly responsible for the fulfillment of an obligation or the compensation of a loss, often in a personal capacity rather than corporate.

Wrongful Acts

Actions that are illegal or immoral, causing harm or damage to others.

Limited Liability Company

A type of business structure where owners have limited personal liability for the debts and actions of the company.

Legal Person

An individual or organization that has legal rights and obligations, capable of entering into legal contracts, and can sue or be sued.