Juniper Company uses a perpetual inventory system.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 Merchandise Inventory $9,750;credit Cash $9,750.
B)Debit Accounts Payable $9,750;credit Merchandise Inventory $9,750.
C)Debit Merchandise Inventory $9,750;credit Sales Returns $1,500;credit Cash $8,250.
D)Debit Merchandise Inventory $9,750;credit Accounts Payable $9,750.
E)Debit Accounts Payable $8,250;debit Purchase Returns $1,500;credit Merchandise Inventory $9,750.

Question

Quizplus · Accepted Answer

The correct journal entry to record the purchase on August 7 is to debit Merchandise Inventory for the amount of the purchase and credit Accounts Payable for the same amount, reflecting the liability to pay the supplier.

Juniper Company Uses a Perpetual Inventory System