A company that uses the perpetual inventory method purchases inventory of $1,000 on account with terms of 2/10,n/30.Which of the following entries would be made to record the payment if it is made 20 days later?
A) $1,000 debit to Accounts payable and a $1,000 credit to Cash
B) $1,000 debit to Accounts payable, a $20 credit to Inventory and a $980 credit to Cash
C) $20 debit to Inventory, a $1,000 debit to Accounts payable and a $1,020 credit to Cash
D) $980 debit to Accounts payable, a $20 debit to Inventory and a $1,000 credit to Cash

Question

Quizplus · Accepted Answer

The payment is made after the discount period, so the full amount of $1,000 is paid without taking any discounts.

A Company That Uses the Perpetual Inventory Method Purchases Inventory