A Company Records Purchases Using the Net Method

question 92

Multiple Choice

A company records purchases using the net method. On February 1, they purchased merchandise inventory on account for $8,300 with terms of 1/10, n/30. The February 1 journal entry to record this transaction would include a:

• A) Debit to Merchandise Inventory of $8,300.
• B) Debit to Merchandise Inventory of $8,217.
• C) Debit to Merchandise Inventory of $83.
• D) Credit to Merchandise Inventory of $83.
• E) Credit to Accounts Payable of $8,300.

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Definitions:

Elasticities of Demand

Refers to various measures of how the quantity demanded of a good responds to changes in prices, income, or other goods' prices.

Segregate Market

The practice of dividing or separating markets into sections or categories based on consumer demographics, behaviors, or other characteristics.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, with elasticity referring to the degree of responsiveness.

Good Substitutes

Products or services that can be used in place of each other, having a high cross-elasticity of demand.