A Merchandiser Purchases Inventory on Account Under a Periodic Inventory

question 172

Multiple Choice

A merchandiser purchases inventory on account under a periodic inventory system with terms of 2/10 n/30. The merchandiser would:

• A)credit Inventory on date of payment if the discount is taken.
• B)credit Inventory on date of payment if the discount is not taken.
• C)credit Purchases Discounts on date of purchase if the discount is taken.
• D)credit Purchases Discounts on date of purchase if the discount is not taken.

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Definitions:

Product Warranty

A guarantee provided by a manufacturer or seller to a buyer, promising to repair or replace the product if necessary within a specified period of time.

Sale Product

Usually refers to the final merchandise available for sale to consumers, differing from raw materials or components used in manufacturing.

Repairing Product

Repairing product involves the process of fixing or restoring a product to its working condition, usually after damage or malfunction.

FICA-Medicare

Part of the U.S. payroll tax that goes towards Medicare, providing health insurance for individuals over 65 and for certain younger people with disabilities.