Question

Foote Company recorded a purchase discount of $200 on merchandise the company had purchased a few days ago. Foote uses the perpetual inventory system. Which of the following answers reflects the effects of this event on the financial statements? Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow

A. NA (200) 200 200 NA NA 200 OA.
B. NA (200) 200 200 NA 200 NA.
C. (200) (200) NA NA NA NA (200) OA.
D. (200) (200) NA NA NA NA NA.

Answer 1

D. (200 ) = (200 ) + NA NA − NA = NA NA

Step-by-step explanation:

Assets = Liab. + Equity Rev. − Exp. = Net Inc. Cash Flow

D. (200 ) = (200 ) + NA NA − NA = NA NA