BetterBuy Sells $50,000 of TVs to a Customer

question 73

Multiple Choice

BetterBuy sells $50,000 of TVs to a customer.The terms include a 2% discount if paid in 7 days and a 1% discount if paid in 8-14 days.BetterBuy receives the money in 12 days.How would the transaction be recorded by BetterBuy?

• A)Debit Inventory for $500 and credit Accounts Payable for $500.
• B)Debit Cash for $49,500,credit Accounts receivable for $50,000,and debit sales discounts for $500.
• C)Debit Accounts receivable for $50,000,credit Cash for $49,500,and credit sales discounts for $500.
• D)Debit Accounts Payable for $500 and credit Inventory for $500.

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Definitions:

Market Participants

Individuals or entities engaging in the buying, selling, or exchange of goods and services in a market.

Standardized

Established to have uniform procedures, dimensions, materials, or tests, to ensure consistency and comparability across different entities or products.

Economic Profits

The excess of total revenue over total costs, including both explicit and implicit costs, in economics.

Market Supply

The total amount of a good or service that producers are willing and able to sell at varying price points, at a given time.