In a Periodic Inventory System, the Entry to Record the Taking

question 32

Multiple Choice

In a periodic inventory system, the entry to record the taking of a cash discount for the purchase of merchandise would include a:

• A)credit to Purchase Discounts
• B)credit to Inventory
• C)debit to Purchase Discounts
• D)credit to Purchase Returns and Allowances.

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Definitions:

Economics

The social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity.

Scarce Resources

Resources that are limited in supply and cannot meet all the wants and needs of a society.

Trade-offs

Decisions that involve sacrificing one goal or benefit in order to gain another, often used in the context of economic and financial planning.

Free Lunch

An expression that suggests there is no such thing as a benefit without a corresponding cost, even if the cost is not immediately apparent.