Using the Gross Method, Record the Payment of the Following

question 27

Multiple Choice

Using the gross method, record the payment of the following transaction in time to take the discount. Clip Company bought $15,000 of merchandise, terms 1/15, n/45. The company uses the voucher system and the periodic inventory method.

• A) Debit Cash $15,000; credit Vouchers Payable $15,000.
• B) Debit Vouchers Payable $15,000; credit Cash $14,850; credit Purchases Discount $150.
• C) Debit Vouchers Payable $14,850; credit Cash $14,850.
• D) Debit Vouchers Payable $15,000; credit Cash $15,000.

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Definitions:

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous period.

Adjusting Entries

Bookkeeping adjustments made before the preparation of financial statements to account for accruals and deferrals not recorded through daily transactions.

Optional

Optional refers to a choice or item that is not mandatory and can be selected based on preference or requirement.

Adjusting Entries

These are journal entries made in accounting at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.