If Merchandise Is Sold for $2,000 Subject to Credit Terms

question 20

Multiple Choice

If merchandise is sold for $2,000 subject to credit terms of 2/10, n/30, the entry to record collection in full within the discount period would include a:

• A) debit to Sales Discounts for $40.
• B) credit to Cash for $1,960.
• C) credit to Accounts Receivable for $40.
• D) None of the above.

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Definitions:

Creative Destruction

The process by which new innovations cause older technologies, companies, or products to become obsolete, driving economic growth through continuous renewal.

Dominant Firms

Companies that have a major portion of market share and can significantly influence market conditions and prices.

New Products

Items or services that have recently been introduced to the market and offer new features, functionalities, or benefits to consumers.

Market Economies

Economic systems in which economic decisions and pricing are guided by the interactions of citizens and businesses rather than by central planning.