ACC 304 All Assignments ACC 304 All Assignments | Page 93

55. The use of a Purchase Discounts account implies that the
recorded cost of a purchased inventory item is its
a. invoice price.
b. invoice price plus any purchase discount lost.
c. invoice price less the purchase discount taken.
d. invoice price less the purchase discount allowable whether taken or
not.
Use the following information for questions 56 and 57.
During 2012, which was the first year of operations, Oswald Company
had merchandise purchases of $985,000 before cash discounts. All
purchases were made on terms of 2/10, n/30. Three-fourths of the
items purchased were paid for within 10 days of purchase. All of the
goods available had been sold at year end.