On March 5, Gibbs Company purchases $5,000 of merchandise from a supplier for cash and records that transaction by increasing its inventory account. On March 30, the company records a $400 decrease in its inventory account. We can assume the company uses the:
A. perpetual inventory method and $400 may represent cost of goods sold.
B. perpetual inventory method and $400 may represent a purchase return.
C. perpetual inventory method and $400 may represent a purchase allowance.
D. All of these answer choices are correct.
Answer: D
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