A Company Using the Net Method of Recording Purchases Failed

question 75

Multiple Choice

A company using the net method of recording purchases failed to take advantage of a discount available. When they pay the full (gross) amount of an invoice at the end of the credit period the journal entry will include a debit to:

• A) Merchandise Inventory.
• B) Sales Discounts.
• C) Discounts Lost.
• D) Cash.
• E) Accounts Receivable.

---

Definitions:

Undue Influence

Improper or manipulative pressure exerted by one person over another in order to change that person's decisions or consent.

Fraudulent Misrepresentation

A false statement of fact made by one party to another party, which has the effect of inducing that party into the contract.

Guided Tour

A tour led by a knowledgeable guide who provides information and insights about the places visited.

Fraudulent Misrepresentation

Intentional provision of false information or deception made by one party to induce another into a contract, resulting in harm or loss.