Juniper Company, Inc

question 109

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 26, it paid the full amount due. The correct journal entry to record the merchandise return on August 11 is:

• A)Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500.
• B)Debit Accounts Payable $1,485; credit Merchandise Inventory $1,485.
• C)Debit Merchandise Inventory $1,500; credit Purchase Returns and Allowances $1,500.
• D)Debit Merchandise Inventory $1,500; credit Cash $1,500.
• E)Debit Accounts Payable $1,500; credit Purchase Returns and allowances $1,500.

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Definitions:

Permutation

A permutation is an arrangement of all or part of a set of objects, with regard to the order of the arrangement.

Income

Financial gain accumulated over a period, such as wages from employment, profits from investments, or returns from assets.

Bootstrap Confidence Interval

A method for estimating the confidence interval of a parameter by resampling with replacement from an original dataset and calculating the interval from the bootstrap samples.

Bias

A systematic error or deviation from the true value in data collection or analysis, which can lead to false conclusions.