Consider the Following Short Case as You Respond to the Next

question 7

Multiple Choice

Consider the following short case as you respond to the next question: VLC Corporation sold merchandise with a cost of $200 on account for $300 to PRT Corporation; credit terms were 2 / 10, n / 30. VLC paid the outgoing freight charge of $10. PRT paid the invoice within the discount period.The entries in VLC's accounting information system to record all the preceding events will include all of the following except:

• A)Debit Accounts Receivable, $300. Credit Sales, $300.
• B)Debit Cost of Goods Sold, $200. Credit Inventory, $200.
• C)Debit Delivery Expense, $10. Credit Cash, $10.
• D)Debit Cash, $294. Debit Inventory, $6. Credit Accounts Receivable, $300.

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Definitions:

Gross Earnings

The total amount of money earned by an individual or company before any deductions or taxes are applied.

Medicare Withholding

The portion of an employee's paycheck that is deducted to contribute to the Medicare program, which provides health insurance to individuals who are over 65 or meet other specific criteria.

Social Security Withholding

The portion of an employee's wage that is deducted and sent to the government to fund Social Security benefits.

Federal Income Tax Withholding

The process by which an employer deducts a portion of an employee's income and pays it directly to the government, as a prepayment of the employee's federal income tax.