Mullis Company Sold Merchandise on Account to a Customer for $625,terms

question 88

Multiple Choice

Mullis Company sold merchandise on account to a customer for $625,terms n/30.The journal entry to record the collection on account would be:

• A)Debit Cash of $625 and credit Sales $625.
• B)Debit Cash of $625 and credit Accounts Receivable $625.
• C)Debit Accounts Receivable $625 and credit Sales $625.
• D)Debit Accounts Receivable $625 and credit Cash $625.
• E)Debit Sales $625 and credit Accounts Receivable $625.

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Definitions:

Liability

A financial obligation or debt owed by a company to another entity.

Consolidate Financial Statements

Combined financial statements of a parent company and its subsidiaries, presenting the group as a single economic entity.

Controlling Interest

Ownership interest in a company that is sufficient to control the company's policies and management decisions, typically through a majority of voting rights.

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.