Question

Paid $209,525 on account for the merchandise purchased in 3 __________.

Options:
A) Installments
B) Equal payments
C) Monthly increments
D) Lump sum

Answer 1

The correct option is Installments. When a company purchases merchandise on account, they buy goods and promise to pay for them at a later date. By making multiple payments, the student is able to spread out the cost of the merchandise over time.

Step-by-step explanation:

The correct option is A) Installments.

When a company purchases merchandise on account, it means that they buy goods and promise to pay for them at a later date. In this case, the student paid $209,525 on account, indicating that they made a payment towards the outstanding balance. This payment was made in 3 installments, which means that it was divided into three separate amounts.

By making multiple payments, the student is able to spread out the cost of the merchandise over time, making it more manageable compared to paying a lump sum amount all at once.