Use the Following Information for Questions

question 1

Multiple Choice

Use the following information for questions
Richey Co.records purchases at net amounts.On May 5 Richey purchased merchandise on account, $16,000, terms 2/10, n/30.Richey returned $1,200 of the May 5 purchase and received credit on account.At May 31 the balance had not been paid.
-The amount to be recorded as a purchase return is

• A)$1,080.
• B)$1,224.
• C)$1,200.
• D)$1,176.

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Definitions:

Payment Now

An immediate payment, as opposed to payments scheduled in the future, often required to secure a purchase or service.

Interest

The cost of borrowing money, typically expressed as a percentage of the total amount borrowed.

Single Payment

A one-time transaction involving the transfer of money or other value from one party to another.

Lender

An individual or institution that provides funds to another with the expectation that the funds will be repaid, typically with interest.