Assume That a Company Records Purchases Net of Discount

question 42

Multiple Choice

Assume that a company records purchases net of discount. If the company bought merchandise valued at $10,000 on credit terms 3/15, net 30, the entry to record a payment for half of the purchase within the discount period would include a debit to

• A) Accounts Payable for $4,850 and a credit to Cash for $4,850.
• B) Accounts Payable for $5,000 and a credit to Cash for $5,000.
• C) Accounts Payable for $4,850 and to Interest Expense for $150, and a credit to Cash for $5,000.
• D) Accounts Payable for $4,850 and to Interest Revenue for $150 and a credit to Cash for $5,000.

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Definitions:

Color-Sensitive

Having a heightened responsiveness or sensitivity to colors, which can influence perception, mood, and behavior.

Rods

Retinal receptors that detect black, white, and gray; necessary for peripheral and twilight vision, when cones don’t respond.

Iris

The colored part of the eye that controls the size of the pupil and thus the amount of light that enters the eye.

Light Entry

The process or manner by which light enters an area or passes through a medium.