Asked by Sydney Henke on May 22, 2024
Verified
Norfolk Sporting Goods purchases merchandise with a catalog list price of $30,000. The retailer receives a 30% trade discount and credit terms of 2/10, n/30. What amount should Norfolk debit to the Inventory account?
A) $21,000
B) $20,580
C) $30,000
D) $29,400
Trade Discount
A reduction in the listed price of goods or services offered by sellers to buyers in the business-to-business market, often determined by quantity purchased or early payment.
Inventory Account
An account in the general ledger that tracks the value of items a company holds for sale in the ordinary course of business.
Catalog List Price
The advertised price of goods or services in a catalog before any discounts, rebates, or special offers are applied.
- Analyze the effects of trade discounts on inventory accounting.
Verified Answer
Learning Objectives
- Analyze the effects of trade discounts on inventory accounting.
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