Merchandise with an Invoice Price of $2,000 Was Purchased on October

question 185

Multiple Choice

Merchandise with an invoice price of $2,000 was purchased on October 3, terms 1/15, n/60. The company uses the net method to record purchases. The entry to record the cash payment of this purchase obligation on October 17 is:

• A) Debit Accounts Payable $1,980; credit Cash $1,980.
• B) Debit Accounts Payable $2,000; credit Cash $2,000.
• C) Debit Accounts Payable $1,980; credit Discounts Lost $20; credit Cash $2,000.
• D) Debit Accounts Payable $2,000; credit Merchandise Inventory $20; credit Cash $1,980.
• E) Debit Accounts Payable $2,000; credit Merchandise Inventory $40; credit Cash $1,960.

---

Definitions:

Meningitis

An inflammation of the membranes (meninges) surrounding the brain and spinal cord, usually caused by an infection.

Prenatal Screening

The testing of unborn babies for the detection of certain diseases or conditions before birth.

Chromosomal Abnormalities

Variations in the number or structure of chromosomes that can lead to birth defects, developmental delays, or genetic disorders.

Amniocentesis

A procedure for prenatal screening for chromosomal abnormalities conducted between the eleventh and eighteenth weeks of pregnancy. With the assistance of ultrasound, a needle is inserted into the amniotic sac via the abdomen and a small amount of amniotic fluid withdrawn. Cells contained in the fluid are then cultured in the lab.