Consider the Following Short Case as You Respond to the Question

question 47

Multiple Choice

Consider the following short case as you respond to the question: VLC Corporation sold merchandise with a cost of $200 on account for $300 to PRT Corporation; credit terms were 2/10, n/30.VLC paid the outgoing freight charge of $10.PRT paid the invoice within the discount period.Assume VLC's general ledger showed a balance in cash of $600 before the preceding events; assume VLC's balance in inventory was also $600.Which of the following statements is most true?

• A)After recording the preceding events, the balance in cash will be equal to the balance in inventory.
• B)After recording the preceding events, the balance in cash will be greater than the balance in inventory.
• C)After recording the preceding events, the balance in cash will be less than the balance in inventory.
• D)After recording the preceding events, the balance in cash will equal the balance in accounts receivable.

---

Definitions:

Strip Bond

A type of bond where the principal and regular coupon payments have been separated and are sold individually.

Compounded Semiannually

Interest calculated twice a year on the initial principal and previously earned interest.

Investment Yield

The profits made from an investment during a specified timeframe, represented as a proportion of the original investment's value.

Maturity Date

The specified date on which the final payment of a loan, bond, or other financial instrument is due to be paid.