Merchandise with an Invoice Price of $2,000 Was Purchased on February

question 12

Multiple Choice

Merchandise with an invoice price of $2,000 was purchased on February 3,terms 2/15,n/60.The company uses the net method to record purchases.The entry to record the cash payment of this purchase obligation on February 27 is:

• A)Debit Accounts Payable $1,960;credit Cash $1,960.
• B)Debit Accounts Payable $2,000;credit Cash $2,000.
• C)Debit Accounts Payable $1,960;debit Discounts Lost $40;credit Cash $2,000.
• D)Debit Accounts Payable $2,000;credit Merchandise Inventory $40;credit Cash $1,960.
• E)Debit Accounts Payable $2,000;credit Discounts Lost $40;credit Cash $1,960.

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Definitions:

Derived Demand

The demand for a product or service that arises from the demand for another product or service. For example, the demand for steel is derived from the demand for cars.

Airbus

A European multinational aerospace corporation that designs, manufactures, and sells civil and military aeronautical products worldwide.

Commercial Aircraft

Airplanes designed and built for the purpose of transporting passengers and cargo commercially, operated by airlines.

Derived Demand

The demand for a product or service that arises from the demand for another product or service.