On March 12, Klein Company Sold Merchandise in the Amount

question 108

Short Answer

On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the gross method of accounting for sales. Babson pays the invoice on March 17, and takes the appropriate discount. The journal entry that Klein makes on March 17 is:
$$\begin{array}{l}\text { A) }\\\begin{array} { | l | r | r | } \hline \text { Cash } & 7,644 & \\\hline \text { Sales discounts } & 156 & \\\hline \text { Accounts receivable } & & 7,800 \\\hline\end{array}\end{array}$$
B)
$\begin{array}{|l|r|r|}\hline \text { Cash } & 4,410 & \\\hline \text { Sales discounts } & 90 & \\\hline \text { Accounts receivable } & & 4,500 \\\hline\end{array}$
C)
$\begin{array}{|l|r|r|}\hline \text { Cash } & 4,500 & \\\hline \text { Accounts receivable } & & 4,500 \\\hline\end{array}$
D)
$\begin{array}{|l|r|r|}\hline \text { Cash } & 7,644 & \\\hline \text { Accounts receivable } & & 7,644 \\\hline\end{array}$
E)
$\begin{array}{|l|r|r|}\hline \text { Cash } & 7,800 & \\\hline \text { Accounts receivable } & & 7,800 \\\hline\end{array}$

Understand the basics of security selection and investment strategies.

Recognize the mechanisms evolved to mitigate potential agency problems.

Comprehend the impact of financial scandals on corporate governance and regulations.

Distinguish between primary and secondary markets, including their significance in the financial system.

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Definitions:

Price-elasticity

A measure of the responsiveness of the quantity demanded or supplied of a good to a change in its price.

Sneaker Manufacturers

Companies engaged in the design, production, and marketing of sneakers for various consumer segments.

Price Competitive

A market condition where businesses strive to offer their goods or services at lower prices than their competitors to attract customers.

Few Substitutes

A market condition where there are limited alternatives for a product, giving the product a higher degree of market power and potentially leading to higher prices.