A company using a perpetual inventory system made the following entry: Debit Accounts Payable for $3,000,credit Inventory for $60,and credit Cash for $2,940.What does this entry reflect?
A)A purchase of inventory at a discount.
B)A return of inventory for credit.
C)A sale of inventory on account.
D)A payment within the discount period for inventory previously purchased on credit.

Question

Quizplus · Accepted Answer

When a perpetual inventory system is used,a purchase discount taken is recorded as a deduction to the Inventory account.Accounts Payable is debited for the full amount owed and cash is credited for the actual amount paid.

A Company Using a Perpetual Inventory System Made the Following