Fowler Company on July 15 Sells Merchandise on Account to Coffey

question 117

Multiple Choice

Fowler Company on July 15 sells merchandise on account to Coffey Co. for $2,000, terms 2/10, n/30. On July 20, Coffey Co. returns merchandise worth $800 to Fowler Company. On July 24, payment is received from Coffey Co. for the balance due. What is the amount of cash received?

• A) $1,200
• B) $1,176
• C) $1,160
• D) $2,000

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Definitions:

Purchasing Power Parity

An economic theory and a method used to determine the relative value of different currencies and the exchange rate needed to equalize the purchasing power of different currencies.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.

Output Per Person

A measure of productivity calculated by dividing total output (such as GDP) by the number of people in the workforce or population.

Cross Price Elasticity

A measure of how the demand for a product changes in response to a change in the price of another related product.