Question
Consider the following short case as you respond to the next question: VLC Corporation sold merchandise with a cost of $200 on account for $300
Consider the following short case as you respond to the next question: VLC Corporation sold merchandise with a cost of $200 on account for $300 to PRT Corporation; credit terms were 2 / 10, n / 30. VLC paid the outgoing freight charge of $10. PRT paid the invoice within the discount period. Assume VLCs general ledger showed a balance in cash of $600 before the preceding events; assume VLCs balance in inventory was also $600. Which of the following statements is most true?
A. After recording the preceding events, the balance in cash will be equal to the balance in inventory.
B. After recording the preceding events, the balance in cash will be greater than the balance in inventory.
C. After recording the preceding events, the balance in cash will be less than the balance in inventory.
D. After recording the preceding events, the balance in cash will equal the balance in accounts receivable.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started