Consider the Following Short Case as You Respond to the Next

question 31

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.Assume VLC's general ledger showed a balance in cash of $600 before the preceding events; assume VLC's balance in inventory was also $600. Which of the following statements is most true?

• A)After recording the preceding events, the balance in cash will be equal to the balance in inventory.
• B)After recording the preceding events, the balance in cash will be greater than the balance in inventory.
• C)After recording the preceding events, the balance in cash will be less than the balance in inventory.
• D)After recording the preceding events, the balance in cash will equal the balance in accounts receivable.