Mars Company Purchased $2,500 of Merchandise on Account, Terms 3/10

question 22

Multiple Choice

Mars Company purchased $2,500 of merchandise on account, terms 3/10 n/60. If payment was made within the discount period, the entry to record the payment under a periodic inventory system would include a credit to:

• A)Cash of $2,425.
• B)Inventory of $2,352.
• C)Accounts Payable of $2,400.
• D)Cash for $2,400.

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Definitions:

Underlying Asset

An asset that determines the value of a financial derivative, such as options or futures.

Put Option

A financial contract giving the buyer the right, but not the obligation, to sell an underlying asset or security at a specified price within a defined time period.

Risk Profile

An individual's or entity's willingness to take risks, as well as the potential financial losses they can afford.

Price Fluctuations

Price fluctuations refer to variations in the selling price of goods and services over a period, influenced by market conditions.