On September 1, Hydra purchased $9,500 of inventory items on credit with the terms 1\15, net 30, FOB destination.Freight charges were $200.Payment for the purchase was made on September 18.Assuming Hydra uses the perpetual inventory system and the net method of accounting for purchase discounts, what amount is recorded as accounts payable from this purchase?

Question

Quizplus · Accepted Answer

Under the net method, the purchase is recorded net of the discount. The discount is 1% of $9,500, which is $95. Therefore, the accounts payable recorded is $9,500 - $95 = $9,405. Freight charges are not included in accounts payable as they are paid separately.

On September 1, Hydra Purchased $9,500 of Inventory Items on Credit