Christian Company Uses the Gross Method of Recording Purchase Discounts

question 38

Multiple Choice

Christian Company uses the gross method of recording purchase discounts on inventory and the perpetual inventory system. When Christian Company makes payment for the inventory within the discount period, the bookkeeper will ________.

• A) debit Accounts Payable, credit Inventory and credit Cash
• B) debit Accounts Payable and credit Inventory
• C) debit Inventory and credit Cash
• D) debit Accounts Payable and credit Purchases

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Definitions:

Pollution Abatement

Measures taken to reduce, control, or eliminate pollution from various sources to improve environmental health.

Diminishing Returns

Diminishing returns is an economic principle stating that as one factor of production increases while others are held constant, the additional output (returns) from the increased factor will eventually decrease.

Free Ride

Benefiting from a service or good without having to bear the cost or effort of obtaining it, usually in the context of public goods.

Illegal File Sharing

The unauthorized distribution of digital content, such as music, movies, or software, over the internet.