Martin Corporation Used the Gross Method of Recording Purchases

question 59

Multiple Choice

Martin Corporation used the gross method of recording purchases.A purchase of $5,600,3/10,n30 would be recorded as:

• A)debit Purchases $5,600; credit Accounts Payable $5,600.
• B)debit Purchases $5,600; credit Vouchers Payable $5,600.
• C)debit Purchases $5,432; credit Accounts Payable $5,432.
• D)debit Purchases $5,432; credit Vouchers Payable $5,432.

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Definitions:

Profit Maximized

The point at which a firm achieves the highest possible profit margin, where marginal revenue equals marginal cost.

Total Cost

The overall expenditure incurred by a company in the production of goods or services, including fixed and variable costs.

Total Revenue

The total income generated from the sale of goods or services by a company.

Profitable One

An entity or venture that generates income exceeding its costs and expenses, thereby yielding a surplus or profit.