The Entry to Record a Purchase of $6,000 in Merchandise

question 42

Multiple Choice

The entry to record a purchase of $6,000 in merchandise assuming terms of 2/10, n/30 and a periodic inventory system would include a(n)

• A) increase to Accounts Payable for $6,000.
• B) increase to Purchases Discounts for $120.
• C) decrease to Purchases for $6,000.
• D) decrease to Accounts Payable for $5,880.

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Definitions:

Equity/Shareholders

Refers to the ownership interest held by shareholders in a corporation, represented by the company's common and preferred stock.

Intrinsic Value

The perceived or calculated true value of an asset, stock, currency, or company based on fundamental analysis, independent of its market value.

Model Inputs

Model Inputs are data or assumptions used as the basis for calculating or predicting outcomes within a financial or mathematical model.

Critical Variables

Key factors or elements that significantly influence the outcome of a process, model, or system, often monitored for management or prediction.