Grant's Hardware Bought $7,500 of Merchandise,terms 1/10,n/30

question 46

Multiple Choice

Grant's Hardware bought $7,500 of merchandise,terms 1/10,n/30.The journal entry to record the transaction under the net approach method would be to:

• A)debit Purchases $7,425;credit Accounts Payable $7,425.
• B)debit Purchases $7,425;credit Vouchers Payable $7,425.
• C)debit Purchases $7,500;credit Vouchers Payable $7,425;credit Discounts Lost $75.
• D)debit Purchases $7,500;credit Cash $7,500.

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Definitions:

March

The third month of the year in the Gregorian calendar.

Standard Amount

A predetermined benchmark for expenses, revenues, or units produced, used for budgeting and measuring performance.

Actual Output

The quantity of finished goods or services produced by a company over a specific period.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost of labor, based on the standard rate and actual hours worked.