Using the Gross Method,record the Payment of the Following Transaction

question 118

Multiple Choice

Using the gross method,record the payment of the following transaction in time to take the discount.Connect Company bought $5,000 of merchandise,terms 2/10,n/30,and uses the periodic inventory system:

• A)debit Cash $5,000;credit Vouchers Payable $5,000.
• B)debit Vouchers Payable $5,000;credit Cash $4,900;credit Purchases Discount $100.
• C)debit Vouchers Payable $4,900;credit Cash $4,900.
• D)debit Vouchers Payable $5,000;credit Cash $5,000.

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Definitions:

Repayment

The act of paying back borrowed money, usually with interest, over a period of time according to a predetermined schedule.

Dividends

A share of a corporation’s profits distributed regularly, usually every three months, to its stockholders.

Inventory

The goods and materials a business holds for the purpose of resale or production.

Depreciation

The accounting process of allocating the cost of tangible assets over their useful lives, reflecting wear and tear, or obsolescence.