A Company Sold Merchandise for $1,000 on Account with Terms

question 25

Multiple Choice

A company sold merchandise for $1,000 on account with terms of 2/10, n/30. The company uses a perpetual inventory system. Defective merchandise of $200 was returned 2 days later. If the payment was received after 20 days, the journal entry to record the cash receipt will include:

• A)a debit to Cash for $980 and a credit to Accounts Receivable for $980.
• B)a debit to Cash for $800 and a credit to Accounts Receivable for $800.
• C)a credit to Sales for $800 and a debit to Cash for $ 800.
• D)a credit to Cost of Goods Sold for $1000 and a debit to Sales for $1,000.

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Definitions:

World Trade Networks

A global system of economic and commercial connections facilitated through the exchange of goods, services, and information across different countries and cultures.

Multiculturalism

The presence of, or support for the presence of, several distinct cultural or ethnic groups within a society.

Assimilation

The process by which a person or a group's language and/or culture come to resemble those of another group, often losing their original cultural identity.

Ethnocide

The deliberate and systematic destruction of the culture of an ethnic group, often alongside physical genocide but can occur separately.