A Company Purchased Inventory for $2,000 from a Vendor on Account

question 42

Multiple Choice

A company purchased inventory for $2,000 from a vendor on account, FOB shipping point, with terms of 2/10, n/30. The company paid $100 cash for freight in. The entry to record payment of invoice within 10 days by the purchaser would include: (Assume a perpetual inventory system)

• A)a debit to Accounts Payable for $1,960 and a credit to Cash for $1,960.
• B)a debit to Accounts Payable for $2,000, a debit to Merchandise Inventory for $100 and a credit to Cash for $1,960.
• C)a debit to Accounts Payable for $2,000, a credit to Merchandise Inventory for $40 and a credit to Cash for $1,960.
• D)a debit to Accounts Payable, for$1,960 a debit to Merchandise Inventory for $40 and a credit to Cash for $2,000.

---

Definitions:

Cooperative Acceptance

The right of employees to be treated fairly and with respect regardless of race, sex, national origin, physical disability, age, or religion, while on the job.

Discriminated Against

Treated unjustly or unequally based on personal characteristics such as race, gender, or age.

Sexual Harassment

Unwelcome or inappropriate sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature in a workplace or other professional or social situations.

Preconventional Moral Development

A stage in Lawrence Kohlberg's theory of moral development characterized by an individual's motivation to follow rules and obey authority to avoid punishment or obtain rewards.