The Entry to Record a Purchase of $2,000 on Account

question 97

Multiple Choice

The entry to record a purchase of $2,000 on account, terms of 2/10, n/30, would include a

• A) debit to Inventory for $40.
• B) credit to Accounts Payable for $2,000.
• C) debit to Accounts Payable for $2,000.
• D) credit to Cash for $2,000.

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Definitions:

Foreign Project

A business venture or investment located outside the investor's domestic country, often subject to additional risks such as currency fluctuations and political instability.

Domestic Project

A project undertaken within a country's borders, focusing on local development or business activities.

Interest Rate Parity

A theory suggesting that the difference in interest rates between two countries is equal to the differential between the forward exchange rate and the spot exchange rate.

Annualized Return

The geometric average amount of money earned by an investment each year over a given time period, expressed as a percentage.