A Company Uses the Perpetual Inventory System and Recorded the Following

Multiple Choice

A company uses the perpetual inventory system and recorded the following entry: $$\begin{array} { | l | r | r | } \hline \text { Accounts Payable } & 2,500 & \\\hline \text { Merchandise Inventory } & & 50 \\\hline \text { Cash } & & 2,450 \\\hline\end{array}$$ This entry reflects a:

A) Return of merchandise.
B) Payment of the account payable less a 1% cash discount taken.
C) Payment of the account payable less a 2% cash discount taken.
D) Sale of merchandise on credit.
E) Purchase of merchandise on credit.