(Appendix) a Purchase Was Made for $200 on Account with Credit

question 33

Multiple Choice

(Appendix) A purchase was made for $200 on account with credit terms of 2/10, n/30. The purchase was recorded using the net-price method. If payment is made 25 days later, the entry to record the payment will be to

• A) debit Accounts Payable for $200 and credit Cash for $200.
• B) debit Accounts Payable for $204, credit Purchases Discounts Lost for $4, and credit Cash for $200.
• C) debit Accounts Payable for $196, debit Purchases Discounts Lost for $4, and credit Cash for $200.
• D) debit Purchases for $196, debit Purchases Discounts Lost for $4, and credit Cash for $200.

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Definitions:

Shorter

Relative term indicating a lesser length, duration, or extent compared to something else.

System 1 Thinking

A term from psychology that describes the brain's fast, automatic, intuitive approach, contrasted with the slower, more analytical System 2 thinking.

Simple Sentence

A simple sentence is a sentence structure that contains only one independent clause and no dependent clauses, with a straightforward statement.

Example

An instance or a situation used to illustrate a principle, show how something works, or justify a course of action.