A company uses the perpetual inventory system and recorded the following entry:
$$\begin{array} { | l | r | r | }
\hline \text { Accounts Payable } & 2,500 & \
\hline \text { Merchandise Inventory } & & 50 \
\hline \text { Cash } & & 2,450 \
\hline
\end{array}$$
This entry reflects a:
A)Purchase
B)Return
C)Sale
D)Payment of the account payable and recognition of a cash discount taken
E)Purchase and recognition of a cash discount taken

Question

A company uses the perpetual inventory system and recorded the following entry:
$$\begin{array} { | l | r | r | } 
\hline \text { Accounts Payable } & 2,500 & \
\hline \text { Merchandise Inventory } & & 50 \
\hline \text { Cash } & & 2,450 \
\hline
\end{array}$$
This entry reflects a:
A)Purchase
B)Return
C)Sale
D)Payment of the account payable and recognition of a cash discount taken
E)Purchase and recognition of a cash discount taken

Quizplus · Accepted Answer

The entry reflects the payment of an account payable of $2,500 with a cash discount of $50, resulting in a cash payment of $2,450.

A Company Uses the Perpetual Inventory System and Recorded the Following