On March 5, Gibbs Company purchases $5,000 of merchandise from a supplier for ca

Question

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: Multiple Choice perpetual inventory method and $400 may represent a purchase return. perpetual inventory method and $400 may represent cost of goods sold. perpetual inventory method and $400 may represent a purchase allowance All of these answer choices are correct.

Explanation / Answer

Perpetual inventory method and $400 may represent purchases return, allowance or cost of goods sold Option 4 is correct

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