A Company Purchased Inventory for $4,000 from a Vendor on Account,FOB

question 145

Multiple Choice

A company purchased inventory for $4,000 from a vendor on account,FOB shipping point,with terms of 2/15,n/30.The company paid $200 cash for freight in.The entry to record the payment of the invoice within 15 days of the invoice date by the purchaser would include ________.(Assume a perpetual inventory system.)

• A) a debit to Accounts Payable for $3,920 and a credit to Cash for $3,920
• B) a debit to Accounts Payable for $4,000, a credit to Merchandise Inventory for $200, and a credit to Cash for $3,800
• C) a debit to Accounts Payable for $4,000, a credit to Merchandise Inventory for $80, and a credit to Cash for $3,920
• D) a debit to Accounts Payable for $3,920, a debit to Merchandise Inventory for $80, and a credit to Cash for $4,000

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Definitions:

Insight

A sudden and often novel realization of the solution to a problem; it contrasts with strategy-based solutions.

Fixation

In psychology, a persistent focus of the id’s pleasure-seeking energies at an earlier stage of psychosexual development.

Sign Language

A form of communication that uses visual gestures and signs, as used by deaf and hard-of-hearing people.

Syntax

Syntax refers to the set of rules, principles, and processes that govern the structure of sentences in a language, including the arrangement of words and phrases to create meaningful sentences.