1. Consider the following facts: - Company A uses the perpetual inventory system
ID: 2448169 • Letter: 1
Question
1.
Consider the following facts:
- Company A uses the perpetual inventory system
- It records inventory purchases at net cost
- It purchased goods for $6,000 with credit terms of 2/10, n/30
- It returned half of the goods purchased
- The discount period expired before it paid the outstanding invoice
The journal to record the payment of the invoice when paid includes a:
a. debit to an expense account for $60.
b. credit to Cash for $2,000.
c. None of these answers are correct
d. debit to Merchandise Inventory for $3,000.
e. credit to cash for $2,940.
2.
Consider the following facts:
- Company A sells merchandise on account for $6,000 to Company C
- The credit terms of the sale are 2/10, n/30
- Company C returns $1,200 of the merchandise
- Company C pays the outstanding balance within the discount period
How much does Company C pay to settle its outstanding balance?
a. $5,904
b. $4,800
c. $5,880
d. $4,754
e. None of these answers are correct
Explanation / Answer
The correct answer is
a. Debit to an expense account of $ 60
2. Company will pay
6000-1200 = $ 4800
4800*98% = $ 4704
The correct answer is e. None of these answers are correct
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