Which of the Following Is the Effect of Purchasing Merchandise

question 139

Multiple Choice

Which of the following is the effect of purchasing merchandise on account with credit terms 2/10, n/30?​

• A) ​There is no effect on the liquidity and profitability metrics.
• B) ​There is an increase in liquidity, while profitability remains unchanged.
• C) ​There is an increase in profitability, while liquidity remains unchanged.
• D) ​There is an increase in the liquidity and profitability metrics.

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Definitions:

Planning

The process of setting objectives, developing strategies to achieve them, and delineating tasks and scheduling to implement the strategies.

Specific Products

Refers to distinct items or goods that are identified individually in inventory or production processes, often requiring unique handling or tracking.

Indirect Costs

Expenses not directly linked to the production of goods or services but necessary for the general operation of a business, such as utilities and administrative salaries.

Wheels

Wheels are circular components that are intended to rotate on an axle bearing; in the context of vehicles, they facilitate movement by minimizing friction.