James Company Experienced the Following Events During Its First Accounting

question 179

Multiple Choice

James Company experienced the following events during its first accounting period:(1) Purchased $10,000 of inventory for cash.(2) Returned $200 of the inventory purchased in Event 1. Inventory was returned for cash.Based on this information, which of the following shows how the recognition of the return will affect the Company's financial statements?

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Incremental Cost

The additional cost associated with producing one more unit of a product or service.