On March 5, Gibbs Company Purchases $5,000 of Merchandise from a Supplier

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 a purchase return.
B) perpetual inventory method and $400 may represent cost of goods sold.
C) perpetual inventory method and $400 may represent a purchase allowance.
D) All of these answer choices are correct.