Stine Company Paid €830 on Account to a Creditor

question 3

Short Answer

Stine Company paid €830 on account to a creditor. The transaction was erroneously recorded as a debit to Cash of €380 and a credit to Accounts Receivable, €380. The correcting entry is

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Definitions:

Investment

Assigning financial resources with the aim of achieving returns or making a profit.

Desired Return

The target profit or income level that an investor or business aims to achieve on an investment or project.

Target Cost

The estimated price for a product that would allow a company to achieve a desired profit margin while remaining competitive in the market.

Useful Life

The estimated duration an asset is expected to be functional and useful before it needs to be replaced or becomes obsolete.