A Company Purchased Merchandise Inventory on Credit for $600 Per

question 3

Multiple Choice

A company purchased merchandise inventory on credit for $600 per unit, and later sold the inventory for $800 per unit. The journal entry to record the purchase of inventory included a debit to:

• A)Accounts Receivable.
• B)Inventory.
• C)Accounts Payable.
• D)Cost of Goods Sold.

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Definitions:

Financial Planning Process

The financial planning process involves setting financial goals, analyzing current financial conditions, developing strategies to achieve those goals, and implementing and monitoring the strategy.

Planning Horizon

The long-range time period the financial planning process focuses on, usually the next two to five years.

Dividend Policy

A company's strategy or policy to decide how much profit it will pay out to shareholders as dividends.

Retention Ratio

The fraction of net profits not paid out as dividends but kept within the corporation for reinvestment or other purposes.