The Entry to Record the Receipt of Payment Within the Discount

question 94

Multiple Choice

The entry to record the receipt of payment within the discount period on a sale of ¥12,500 with terms of 2/10, n/30 will include a credit to

• A) Sales Discounts for ¥250.
• B) Cash for ¥1,225.
• C) Accounts Receivable for ¥12,500.
• D) Sales Revenue for ¥12,500.

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Definitions:

Lease

A contractual agreement where one party (the lessor) allows another party (the lessee) to use an asset for a specified period in exchange for payment.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the quantity of output produced, representing the average cost per unit of output.

Marginal Cost

The amount spent on producing an incremental unit of a product or service.

Output

Refers to the amount of product or service produced within a given period by a firm, industry, or country.