Joe Company Sold Merchandise with an Invoice Price of $1,000

question 74

Multiple Choice

Joe Company sold merchandise with an invoice price of $1,000 to Gibbs, Inc., with terms of 2/10, n/30. Which of the following is the correct entry for Joe Company to record the collection from Gibbs within 30 days if the company uses the periodic inventory system?

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D

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Definitions:

Assets

Economic resources owned by a business or individual that are expected to provide future benefits.

Par Value

The face value of a bond or stock as stated by the issuer, which bears importance in the legal capital of a company.

Land

A physical, immovable property asset, representing the earth's surface not including bodies of water or resources below the surface.

Cash Dividend

A distribution of profits by a corporation to its shareholders in the form of cash.