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.The entries in VLC's accounting information system to record all the preceding events will include all of the following except:
A)Debit Accounts Receivable, $300. Credit Sales, $300.
B)Debit Cost of Goods Sold, $200. Credit Inventory, $200.
C)Debit Delivery Expense, $10. Credit Cash, $10.
D)Debit Cash, $294. Debit Inventory, $6. Credit Accounts Receivable, $300.

Question

Quizplus · Accepted Answer

Option A records the sale, Option B records the cost of goods sold, and Option C records the delivery expense. Option D, however, is incorrect because it incorrectly records a debit to inventory. Since PRT paid within the discount period, VLC would not need to record a return of merchandise, so there would be no change to inventory. The correct entry would be to debit Cash for the amount received ($300 less the discount of $6), debit Sales Discounts for the discount amount ($6), and credit Accounts Receivable for the total amount due ($300).

Consider the Following Short Case as You Respond to the Next