The entry to record a purchase of $6,000 in merchandise assuming terms of 2/10, n/30 and a periodic inventory system would include a(n)
A) increase to Accounts Payable for $6,000.
B) increase to Purchases Discounts for $120.
C) decrease to Purchases for $6,000.
D) decrease to Accounts Payable for $5,880.

Question

Quizplus · Accepted Answer

The entry to record the purchase would include an increase to Accounts Payable for the full amount of $6,000, as the discount is not recorded until payment is made within the discount period.

The Entry to Record a Purchase of $6,000 in Merchandise