Foote Company was granted 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 reflects the effects of thisevent on the financial statements?A.B.C.D.Assetsn/an/a(200)(200)Multiple ChoiceOOO OOption COption DOption BOption ABalance Sheet= Liabilities +(200)(200)(200)(200)Stockholders'Equity200200n/an/aRevenue200200n/an/aIncome StatementExpensen/an/an/an/aNet Income200200n/an/aStatement of Cash Flows200 Operating Activityn/a(200) Operating Activityn/a

Purchase discount under perpetual system affects inventory accounts

Answered: 5+ Stockholders' Equity 200 200 n/a n/a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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5+ Stockholders' Equity 200 200 n/a n/a Revenue 200 200 n/a n/a Expense n/a n/a n/a n/a Net Income 200 200 n/a n/a Statement of Cash Flows 200 Operating Activity n/a (200) Operating Activity n/a