TNT Corporation Pays an Invoice for $4,500 in Time to Take

question 3

Multiple Choice

TNT Corporation pays an invoice for $4,500 in time to take a 5% discount. The journal entry to record the payment of this invoice is:

• A)debit Accounts Payable $4,500; credit Cash $4,500.
• B)debit Accounts Payable $4,275; credit Cash $4,275.
• C)debit Accounts Payable $4,275, debit Inventory $225; credit Cash for $4,500.
• D)debit Accounts Payable $4,500; credit Inventory $225, credit Cash for $4,275.

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Definitions:

High-Cost Producers

Businesses or entities that incur higher expenses in the production of goods or services, often leading to higher selling prices to maintain profitability.

Low-Cost Producers

Companies or entities that can produce goods or services at a lower expense than competitors, often due to efficiencies or advantages.

Market System

An economic system in which decisions regarding investment, production, and distribution are guided by the price signals created through the forces of supply and demand.

Efficient Production Technique

A method of production that achieves the highest output with the given set of inputs or resources, minimizing waste and costs.