A Company Using the Gross Method of Recording Purchases and a Perpetual

Multiple Choice

A company using the gross method of recording purchases and a perpetual inventory system failed to take advantage of a discount available. When it pays the amount of the invoice at the end of the credit period, the journal entry will include a debit to:

A) Merchandise Inventory.
B) Sales Discounts.
C) Accounts Payable.
D) Cash.
E) Purchase Discounts.