In: Finance
A company that uses the gross method of recording purchases and a perpetual inventory system made a purchase of $2,200 with terms of 2/10, n/30. The entry to record the purchase would be:
Debit Merchandise Inventory $2,156; credit Accounts Payable $2,156. Debit Merchandise Inventory $2,200; credit Accounts Payable $2,200. Debit Merchandise Inventory $2,156; credit Cash for $2,156. Debit Merchandise Inventory $2,156; debit Discounts Lost $44; credit Accounts Payable $2,200. Debit Accounts Payable $2,200; credit Discounts Lost $44; credit Cash $2,156.
Answer is. Debit Merchandise inventory $2200; Credit Accounts payable $ 2200. | |||||||
Explanation: | |||||||
Journal entry for purchase: | |||||||
Accounts title and explanations | Debit $ | Credit $ | |||||
Merchandise inventory | 2200 | ||||||
Accounts payable | 2200 | ||||||