A purchase on account with an invoice price of $1,500 has been made.The entry to record the payment after the 2 percent discount period would include a(n)
A)decrease to Accounts Payable for $1,500.
B)decrease to Purchases Discounts for $30.
C)increase to Accounts Payable for $1,470.
D)decrease to Cash for $1,470.

Question

Quizplus · Accepted Answer

DWhen paying after the discount period, the full invoice amount is paid, so Accounts Payable decreases by $1,500 (A), and Cash decreases by $1,500, but since the question specifies a payment of $1,470, which would be incorrect after the discount period, option D is technically incorrect based on the question's premise. However, understanding the intent, if the payment was made within the discount period, Cash would decrease by the discounted amount ($1,470), but since the scenario specifies payment after the discount period, the correct understanding is that Cash decreases by the full invoice amount ($1,500), making A the most accurate choice under normal circumstances.

A Purchase on Account with an Invoice Price of $1,500