Indicate the Account(s) to Be Debited and Credited to Record

question 112

Multiple Choice

Indicate the account(s) to be debited and credited to record the following transactions.

-Purchased merchandise on credit; terms of 2/10, n/30. - Perpetual
Debit ________ Credit ________

• A) Cash
• B) Accounts receivable
• C) Merchandise inventory
• D) Supplies
• E) Accounts payable
• F) Sales
• G) Sales returns and allowances
• H) Sales discounts
• I) Cost of goods sold
• J) Purchases
• K) Purchase returns and allowances
• L)Purchase discounts
• M) Freight-in

Explain the measurement principle and the monetary unit assumption.

Determine the correct recording of transactions according to the cost principle.

Understand the impact of ethical lapses in financial reporting and identify factors contributing to such issues.

Differentiate between internal and external users of accounting information and the types of reports they utilize.

---

Definitions:

Capital Expenditures

Funds used by a company to acquire or upgrade physical assets such as equipment, property, or industrial buildings, to enhance future earnings.

Repairs and Maintenance

Expenditures made to restore or maintain the functionality and efficiency of an asset without extending its useful life significantly.

Net Income

The amount of money a company has earned during a specific period, after all deductions are made.

Ordinary Repairs

Expenses for routine maintenance and repairs that maintain the efficient operation of an asset but do not materially extend its life or increase its value.