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

question 157

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 perpetual 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:

Current Profitability

A measure of a company's financial performance in the current period, often assessed through margins or net income.

Constrained Resource

A limited resource in a production process that restricts the company's ability to meet demand, influencing the maximum output.

Constrained Resource

A limited capacity resource that restricts an organization's ability to meet production demands or goals.

Financial Advantage

The benefit or upper hand that a business or individual gains by optimizing financial decisions and resource allocations to enhance wealth or profitability.