Tedder Uses a Periodic Inventory System

question 115

Multiple Choice

Tedder uses a periodic inventory system. At the end of January, 20 units were on hand. The following additional information is available for the month of January:

-Refer to the information provided for Tedder Co. Which of the following entries correctly records the purchase assuming the units were acquired on credit under terms of 2/10, n/30?

• A)Inventory 270.00 Cash 270.00
• B)Inventory 270.00Accounts payable 270.00
• C)Purchases 264.60Purchase discounts 5.40Accounts payable 270.00
• D)Purchases 270.00Accounts payable 270.00

---

Definitions:

Savings

Money that is set aside from one's income or earnings for future use, often accumulating interest.

Saving

The portion of income that is not spent on immediate consumption but is set aside for future use, often in investments or deposits.

Disposable Income

The available amount for households to spend and save, subsequent to income tax deductions.

Autonomous Consumption

The level of consumption that occurs when income is zero, representing the expenditures that consumers must make even when they have no income.