For a company using a perpetual inventory system, the journal entry to record the purchase of $3,500 of goods on account, with terms of 4/10, n/30, would include a
A)debit to Accounts Payable of $3,500.
B)credit to Accounts Payable of $3,360.
C)debit to Inventory of $3,360.
D)debit to Inventory of $3,500.

Question

Quizplus · Accepted Answer

The correct journal entry for purchasing $3,500 of goods on account under a perpetual inventory system involves debiting Inventory for the full purchase amount of $3,500, reflecting the increase in inventory. The credit would be to Accounts Payable for $3,500, not listed in the options, indicating the amount owed to the supplier. The terms 4/10, n/30 are payment terms offering a discount for early payment, but they do not affect the initial recording of the inventory purchase.

For a Company Using a Perpetual Inventory System, the Journal