The Collection of a $2,000 Account Within the 2 Percent

question 67

Multiple Choice

The collection of a $2,000 account within the 2 percent discount period will result in a

• A) debit to Sales Discounts for $40.
• B) debit to Accounts Receivable for $1,960.
• C) credit to Cash for $1,960.
• D) credit to Accounts Receivable for $1,960.

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Definitions:

Total Costs

The aggregate of all expenses incurred by a business, including both fixed and variable costs.

Final Production Department

The last stage in a manufacturing process where products are completed and ready for sale or distribution.

Completed Goods

Products that have undergone all stages of production and are ready for sale or distribution to customers.

Process Cost Summary

A report that aggregates the total costs involved in manufacturing a product within a specific period, breaking these down into per-unit costs.