A company using the gross method of accounting for purchases and a perpetual inventory system recorded the following entry: This entry reflects a:
A)Purchase of merchandise on credit.
B)Return of merchandise.
C)Sale of merchandise on credit.
D)Payment of the account payable less a 2% cash discount taken.
E)Payment of the account payable less a 1% cash discount taken.

Question

A company using the gross method of accounting for purchases and a perpetual inventory system recorded the following entry:  This entry reflects a:
A)Purchase of merchandise on credit. 
B)Return of merchandise. 
C)Sale of merchandise on credit. 
D)Payment of the account payable less a 2% cash discount taken. 
E)Payment of the account payable less a 1% cash discount taken.

Quizplus · Accepted Answer

The Answer of A company using the gross method of accounting for purchases and a perpetual inventory system recorded the following entry:  This entry reflects a:
A)Purchase of merchandise on credit. 
B)Return of merchandise. 
C)Sale of merchandise on credit. 
D)Payment of the account payable less a 2% cash discount taken. 
E)Payment of the account payable less a 1% cash discount taken.

A Company Using the Gross Method of Accounting for Purchases