Multiple Choice Question On Dec. 20, X-Mart received a $100 allowance because the merchandise it purchased on account, earlier in the month, was of poor quality. Demonstrate the required journal entry on X-Mart's books for the allowance assuming the perpetual inventory method. Debit Accounts Payable $100; credit Merchandise Inventory $100. Debit Accounts Payable $100; credit Cash $100. Debit Accounts Payable $100; credit Purchase Returns $100. Debit Merchandise Inventory $100; credit Accounts Payable $100.

The correct option is debit accounts payable $100 and credit merchandise inventory $100

Explanation:

The option of crediting cash $100 would be applicable as there is no actual cash refund and even there was a cash refund the correct entry would have been a debit to cash account.

There is no need to credit purchases returns as that would been done when the faulty goods were returned.

The is evidence to support debiting merchandise inventory since no new stock was received, that also warrants credit accounts payable

two years ago, when picking flowers in the mountains back of yosemite valley, i found a book. it was blotted and storm-beaten; all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however; many of the inner pages were well preserved. and although all were more or less stained and torn, whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today; its granite pages have been torn and blurred by the same storms that wasted the castaway book.

two years ago, when picking flowers in the mountains back of yosemite valley; i found a book. it was blotted and storm-beaten, all of its outer pages were mealy and crumbly. the paper seemed to dissolve like the snow beneath which it had been buried, however, many of the inner pages were well preserved. and although all were more or less stained and torn; whole chapters were easily readable. this is the condition of the great open book of yosemite glaciers today, its granite pages have been torn and blurred by the same storms that wasted the castaway book.