The Entry to Record the Receipt of Payment Within the Discount

question 21

Multiple Choice

The entry to record the receipt of payment within the discount period on a sale of $2,000 with terms of 2/10, n/30 will include a credit to

• A)Sales Discounts for $40.
• B)Cash for $1,960.
• C)Accounts Receivable for $2,000.
• D)Sales Revenue for $2,000.

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Definitions:

Inventory Holding Cost

The costs related to keeping inventory that hasn't been sold, which encompass storage fees, insurance, and value reduction over time.

Overall Market

The total demand and supply in a given market, encompassing all consumers, producers, goods, and services.

Market Share

The portion of a market controlled by a particular company or product, often expressed as a percentage of total sales in that market.

Forward Buying

The practice of purchasing goods in advance of need, often in larger quantities, to take advantage of favorable pricing, secure inventory, or hedge against future price increases.