The Entry to Record Payment of a $1,500 Purchase Within

question 8

Multiple Choice

The entry to record payment of a $1,500 purchase within the 2 percent discount period would include a(n)

• A) decrease to Accounts Payable for $1,470.
• B) increase to Purchases Discounts for $30.
• C) increase to Accounts Payable for $1,500.
• D) increase to Cash for $1,500.

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Definitions:

Controllable Variance

Controllable variance refers to the difference between actual costs and the expected costs that can be controlled or influenced by a manager.

Actual Indirect Factory Wages

This represents the wages paid to workers who are not directly involved in production but support the manufacturing process.

Budgeted Amounts

Financial plans that project income, expenditures, and allocations for a specific period, often used for control and decision-making purposes.

Actual Production

The real, quantifiable amount of goods or services produced by a company within a specific period.