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

question 103

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 the shipper $100 cash for freight in. The company then returned damaged goods worth $200. The invoice has been paid 8 days after the sale. Assuming that there was no beginning inventory balance, the cost of inventory would be: (Assume a perpetual inventory system)

• A)$1,764.
• B)$1,864.
• C)$2,100.
• D)$1,900.

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Definitions:

Shaped

The process by which behaviors are gradually guided toward a desired outcome through reinforcement, as used in behavior modification techniques.

Defined

Described or explained clearly with specific details and boundaries.

Compensation

An effort to overcome a real or imagined deficiency by developing a skill or trait to make up for the deficiency.

Real-life Example

An actual instance or occurrence in everyday life used to illustrate or explain a concept, idea, or phenomenon.