A Company That Uses the Net Method of Recording Purchases

question 248

Multiple Choice

A company that uses the net method of recording purchases and a perpetual inventory system purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise.On July 28,it paid the full amount due.The correct journal entry to record the payment on July 28 is:

• A)Debit Merchandise Inventory $1,600; credit Cash $1,600.
• B)Debit Cash $1,600; credit Accounts Payable $1,600.
• C)Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568.
• D)Debit Accounts Payable $1,800; credit Cash $1,800.
• E)Debit Accounts Payable $1,568; debit Discounts Lost $32; credit Cash $1,600.

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Definitions:

Global Marketplace

An international arena where goods and services are traded across borders, allowing for greater competition and diversity of products.

Marketing Action

Any activity or initiative undertaken by an organization to promote its products or services, aiming to increase brand awareness and drive sales.

Growth Potential

The capacity of a business or economy to expand and generate increased profits over time.

Target Market

A specific group of consumers at whom a company aims its products and services.