Furniture with a $3,000 Sticker Price Is Purchased for $2,500

question 114

Multiple Choice

Furniture with a $3,000 sticker price is purchased for $2,500 on account. Which of the following entries would properly record this purchase?

• A) Option: A
• B) Option: B
• C) Option: C
• D) Option: D

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Definitions:

Other Comprehensive Income

This includes revenues, expenses, gains, and losses that are excluded from net income on the income statement.

Equity Method

A method of accounting for investments in which the investor recognizes income based on the proportionate share of the investee’s profit or loss.

Investment Account

An account held at a financial institution or brokerage that is used to hold securities, stocks, bonds, mutual funds, and other investments.