A Company Using the Gross Method of Accounting for Purchases

Multiple Choice

A company using the gross method of accounting for purchases and a perpetual inventory system recorded the following entry: This entry reflects a:

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