Assume the Periodic Inventory System Is Used $\begin{array}{lll}\text { Cash } & 500 \\\quad \text { Accounts Receivable } & & 500 \\\end{array}$

question 80

Multiple Choice

Assume the periodic inventory system is used.Krinkle Company sold inventory on account for $500 on May 8,20X3,with terms of 2/10,n/30.On May 16,20X3 the appropriate payment was received from the customer.Which of the following is the journal entry to record the May 16 transaction on Krinkle's books?

• A) \(\begin{array}{lll}
• \text { Cash } & 500 \\
• \quad \text { Accounts Receivable } & & 500 \\
• \end{array}\)
• B) \(\begin{array}{lccc}
• \text { Cash } & 490 & \\
• \text { Cash Discounts on Sales } & 10 & \\
• \quad \text { Accounts Receivable } & &500 \\
• \end{array}\)
• C) \(\begin{array}{lccc}
• \text { Cash } & 490 & \\
• \text { Sales } & 10 \\
• \quad \text { Accounts Receivable } & &500 & \\
• \end{array}\)
• D)\(\begin{array}{lccc}
• \text { Cash } &500 & \\
• \quad \text { Cash Discounts on Sales }&&10 \\
• \text { Accounts Receivable } & & 490 \\
• \end{array}\)
• E)\(\begin{array}{lccc}
• \text { Cash } & 500& \\
• \text { Sales } & & 10 \\
• \text { Accounts Receivable } & & 490
• \end{array}\)

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Definitions:

Trade Deficit

A situation where a country's imports exceed its exports, leading to more money leaving the country for buying foreign goods than is entering from selling domestic goods.

Current Account Surplus

A scenario in which the total goods, services, and transfers a country exports are greater than what it imports.

Trade Surplus

A situation where a country's exports exceed its imports during a specific period of time, indicating a positive trade balance.

Current Account Deficit

An assessment of a nation's trade balance when the cost of imported goods and services surpasses the value of its exports.