The Collection of a $600 Account Beyond the 2 Percent

question 196

Multiple Choice

The collection of a $600 account beyond the 2 percent discount period will result in a

• A) debit to Cash for $588.
• B) debit to Accounts Receivable for $600.
• C) debit to Cash for $600.
• D) debit to Sales Discounts for $12.

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Definitions:

Register Securities

The process of documenting ownership of stocks or bonds with the appropriate regulatory body.

1933 Securities Act

A U.S. law enacted to ensure more transparency in financial statements so investors can make informed decisions; it requires securities to be registered with the Securities and Exchange Commission.

Criminal Prosecution

The process by which a person accused of committing a crime is charged, tried, and judged, potentially leading to punishment.

Registration Statement

A description, filed with the SEC, of securities being offered for sale; includes an explanation of how proceeds from the sale will be used, information on the registrant’s business and properties, and certified financial statements.