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:

Z Problem-solving Model

A structured approach to problem-solving that involves examining different aspects and perspectives of an issue before making a decision.

Rational Model

A decision-making framework assuming the best possible outcome through logical and structured steps.

Emotion

A complex psychological state that involves a subjective experience, a physiological response, and a behavioral or expressive response.

Z Problem-solving Model

A decision-making process that alternates between analytical and intuitive thinking to find solutions.