On November 10 of the Current Year, Flores Mills Provides $\begin{array}{c}\text { Cash } &7,840\\\qquad \text { Accounts Receivable }&&7,840\end{array}$

question 58

Multiple Choice

On November 10 of the current year, Flores Mills provides services to a customer for $8,000 with credit terms 2/10, n/30. The customer made the correct payment on November 17. How would Flores record the collection of cash on November 17?

• A) \(\begin{array}{c}
• \text { Cash } &7,840\\
• \qquad \text { Accounts Receivable }&&7,840
• \end{array}\)
• B) \[\begin{array} { l r r }
• \text { Cash } & 7,840 & \\
• \text { Sales Discounts } & 160 & \\
• \quad \text { Accounts Receivable } & & 8,000
• \end{array}\]
• C) \[\begin{array} { l r r }
• \text { Cash } & 7,840 & \\
• \text { Sales Revenue } & 160 & \\
• \quad \text { Accounts Receivable } & & 8,000
• \end{array}\]
• D) \(\begin{array}{l}
• \text { Cash } &8,000\\
• \text { Accounts Receivable }&&8,000
• \end{array}\)

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Definitions:

Direct Labor Cost

The wages and other costs for labor that is directly involved in the production of goods.

Manufacturing Overhead

All manufacturing costs except direct labor and direct materials, including maintenance and utilities.

Direct Labor Cost

The wages and benefits paid to workers who are directly involved in the production of goods or the provision of services.

Work in Process Inventory

Goods that are in the midst of production and not yet complete at the conclusion of an accounting cycle.