The entry to record a payment on a $500 account within the 2% discount period would include a
A) debit to Accounts Payable for $490.
B) debit to Accounts Payable for $500.
C) credit to Purchases for $510.
D) debit to Cash for $490.

Question

Quizplus · Accepted Answer

The correct entry would be a debit to Accounts Payable for $500, as this is the original amount owed. The discount is accounted for separately, typically by crediting a Discounts Received account for $10 and crediting Cash for $490.

The Entry to Record a Payment on a $500 Account