[The Following Information Applies to the Questions Displayed Below

question 95

Multiple Choice

[The following information applies to the questions displayed below.]
Washington Warehouse is a small retail business that specializes in the sale of top-of-the-line televisions.This year,the store has begun to carry the Flat TV manufactured by Bass Co.Thus far,Washington has recorded the following transactions involving the Flat TV:

-If Washington uses a perpetual inventory system,the journal entry to record the purchase on January 18th would include which of the following?

• A)A debit to the Purchases account for $7,000.
• B)A debit to the Cost of Goods Sold for $7,000.
• C)A credit to Inventory for $7,000.
• D)A debit to Inventory for $7,000.

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Definitions:

General Journal Entry

A record in the general journal that includes all the financial transactions of a company, showing accounts affected, amounts, and whether those amounts are debits or credits.

Amortizing

The process of gradually paying off a debt over time through regular payments.

Straight-Line Method

A method of calculating depreciation by evenly distributing the cost of an asset over its useful life.

Semiannual Interest

An interest payment made twice per year on investment vehicles such as bonds, which represents a portion of the annual interest rate.