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

question 158

Multiple Choice

In a periodic inventory system, the entry to record the sale of $2,000 of merchandise on account with a cost of $1,400 would include a:

• A)credit to Accounts Receivable for $1,400.
• B)debit to Accounts Receivable for $2,000.
• C)debit to Cost of Goods Sold for $2,000.
• D)credit to Inventory for $1,400.

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Definitions:

Discharge in Bankruptcy

The legal process that releases a debtor from most of their debts, providing a fresh financial start, as determined under bankruptcy law.

Down Payment

An initial, upfront payment made on a purchase, typically significant in value, with the balance to be paid later.

Voluntary Bankruptcy

The act of deliberately filing for bankruptcy by an individual or organization as a mechanism to address insurmountable debt.

Bankruptcy Petition

A formal request filed by an individual or business to declare bankruptcy, seeking protection from creditors.