Assuming That the Net Price Method of Recording Purchases Is

question 39

Multiple Choice

Assuming that the net price method of recording purchases is used and that the business uses the perpetual method of inventory recording, the correct entry to record the purchase of goods for $5000 on credit, with terms of 2/10, n/30 is: (ignore GST) .

• A) DR Inventory $5000; CR Accounts payable $5000
• B) DR Inventory $4900; CR Accounts payable $4900
• C) DR Inventory $4900; DR Discount allowed $100: CR Accounts payable $5000
• D) DR Purchases $5000; CR Accounts payable $4900; CR Discount allowed $100

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Definitions:

Full Employment

A state in an economy where all eligible workers who want to work at current wage rates can find employment, with no involuntary unemployment.

Recessions

Economic periods of decline characterized by falling GDP and increasing unemployment, often leading to reduced consumer spending and investment.

Recession

A period of temporary economic decline during which trade and industrial activities are reduced, often identified by a fall in GDP in two successive quarters.

1942

A year during World War II marked by significant global conflict and historical events.