A merchandiser purchases inventory on account under a perpetual inventory system with terms of 2/10 n/30. The merchandiser would:
A)credit Inventory on date of payment if the discount is taken.
B)credit Inventory on date of payment if the discount is not taken.
C)credit Purchases Discounts on date of purchase if the discount is taken.
D)debit Purchases Discounts on date of purchase if the discount is not taken.

Question

Quizplus · Accepted Answer

Under a perpetual inventory system, when a discount is taken, the inventory account is credited to reduce its cost to the net amount paid. This reflects the actual cost of the inventory after taking into account the discount received.

A Merchandiser Purchases Inventory on Account Under a Perpetual Inventory