If Creditors Are Paid Within the Discount Period, the Current

question 70

Multiple Choice

If creditors are paid within the discount period, the current treatment required by the accounting standards for the discount received is to:

• A)credit the Discount allowed account.
• B)credit the Inventory account with the net settlement discount.
• C)debit the Discount received account.
• D)No entry is required.

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Definitions:

Pareto Optimal

A state of allocation of resources from which it is impossible to reallocate to make any one individual better off without making at least one individual worse off.

Competitive Equilibrium

A state in markets where supply equals demand, and no participant has an incentive to change their behavior.

Strawberries

A sweet, red, heart-shaped fruit that is widely appreciated for its characteristic aroma, bright red color, juicy texture, and sweetness.

Champagne

A sparkling wine produced from grapes grown in the Champagne region of France, known for its production method and prestigious reputation.