Assume That a Company Records Purchases Net of Discount

question 142

Multiple Choice

Assume that a company records purchases net of discount. If the company bought merchandise valued at $10,000 on credit terms 3/15, n/30, the entry to record a payment for half of the purchase within the discount period would include a debit to:

• A) Accounts payable for $4,850 and a credit to cash for $4,850
• B) Accounts payable for $5,000 and a credit to cash for $5,000
• C) Accounts payable for $4,850 and to interest expense for $150, and a credit to cash for $5,000
• D) Accounts payable for $5,000 and to interest revenue for $150 and to cash for $4,850

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Definitions:

Color Blindness

A visual impairment in which a person has difficulty distinguishing between certain colors, typically red and green or blue and yellow.

Reds And Greens

Refers to the basic colors detected by the cones in the human eye, fundamental to color vision theories.

Lateral Inhibition

A process in the nervous system where neural activity in one neuron inhibits the activity of neighboring neurons, enhancing contrast in sensory information.

Visual System

The part of the central nervous system that is responsible for processing visual information, consisting of the eyes, optic nerves, brain, and pathways that connect them.