Juniper Company uses a perpetual inventory system and the gross method of accounting for purchases. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 16, it paid the full amount due. The correct journal entry to record the purchase on August 7 is:
A. Debit Accounts Payable $9,750; credit Merchandise Inventory $9,750.
B. Debit Merchandise Inventory $9,750; credit Accounts Payable $9,750.
C. Debit Merchandise Inventory $9,750; credit Sales Returns $1,500; credit Cash $8,250.
D. Debit Accounts Payable $8,250; debit Purchase Returns $1,500; credit Merchandise Inventory $9,750.
E. Debit Merchandise Inventory $9,750; credit Cash $9,750.
Answer: B
You might also like to view...
From the standpoint of the individual stockholder, one of the most important measures of profitability of the firm is the earnings per share
a. True b. False Indicate whether the statement is true or false
Which strategy can be legally adopted by organizations looking to restructure the workforce to minimize the expense of benefits?
A. limiting the coverage on life insurance based upon an employee's age B. recruiting new employees instead of demanding overtime from existing employees C. substituting HMO and PPO plans with traditional health insurance plans D. using more full-time rather than part-time employees E. using more independent contractors rather than hiring additional employees
The allowance for doubtful accounts, which appears as a deduction from accounts receivable on a balance sheet, is an application of the
a. going-concern assumption. b. revenue recognition principle. c. matching principle. d. materiality constraint.
Brice Foods Group, a European food retailer that operates supermarkets in seven countries, engaged in the following transaction during 2013: purchased and received inventory costing €500 million on account from various suppliers. Indicate the effects of the transaction on the balance sheet equation. Brice Foods Group applies IFRS, and reports its results in millions of euros
a. Assets + €500 million; Liabilities + €500 million b. Assets + €500 million; Shareholders' Equity + €500 million c. Liabilities + €500 million; Shareholders' Equity + €500 million d. Liabilities + €500 million; Shareholders' Equity - €500 million e. Assets + €500 million; Shareholders' Equity - €500 million