Lynn Corporation Bought $8,000 of Merchandise from Woods Corporation, Terms

question 1

Multiple Choice

Lynn Corporation bought $8,000 of merchandise from Woods Corporation, terms 2/10, n/30. The company uses the periodic inventory system and the voucher system. The journal entry to record the payment under the net method after the discount period would be to:

• A) debit Vouchers Payable $8,000; credit Cash $8,000.
• B) debit Vouchers Payable $8,000; credit Discounts Lost $160; credit Cash $7,840.
• C) debit Vouchers Payable $7,840; credit Cash $7,840.
• D) debit Vouchers Payable $7,840; debit Discounts Lost $160; credit Cash $8,000.

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Definitions:

California

A U.S. state on the west coast, known for its diverse geography, significant economic contributions, and cultural impact.

Economic Freedom

The ability of individuals and businesses to make their own economic decisions without undue government intervention, including property rights, free trade, and access to markets.

Gold Discovery

generally refers to the finding of gold resources, notably the California Gold Rush of 1849 which led to massive migration and economic expansion.

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The act of formally withdrawing from an organization, union, or especially a federation of states, such as the Southern states seceding from the Union leading to the Civil War.