If Merchandise for Resale Is Purchased for $2,000, Terms 2/10

question 111

Multiple Choice

If merchandise for resale is purchased for $2,000, terms 2/10, n/30, the entry to record the purchase should be which of the following (assuming a periodic inventory system) ? $$\begin{array} { | l | l | r | l | r | } \hline & \text { Debit } && \text { Credit } \\\hline \text { A } & \text { Inventory } & \$ 2,000 & \text { Trade payables } & 1,960 \\\hline B & \text { Accounts payable } & 1,960 & \text { Inventory } & 1,960 \\\hline \text { C } & \text { Inventory } & 1,960 & \text { Trade payables } & 2,000 \\\hline D & \text { Purchases } & 2,000 & \text { Trade payables } & 2,000 \\\hline\end{array}$$

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D

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Definitions:

Opportunity

A favorable situation or set of circumstances that presents itself, which can potentially lead to growth, development, or success if capitalized on properly.

Strength

An attribute or internal capability of a company or individual that provides a competitive advantage in the market or enhances performance.

Weakness

A term used in SWOT analysis to denote internal limitations or areas where a business or individual performs poorly.

SWOT Analysis

A strategic planning tool used to identify and understand the Strengths, Weaknesses, Opportunities, and Threats related to a business or project.