Toy Bots Company bought $8,000 of merchandise, terms 2/10, n/30. The company uses the periodic inventory system and the voucher system. The journal entry to record the transaction under the net method would be to:
A) debit Purchases $7,840; credit Accounts Payable $7,840.
B) debit Purchases $8,000; credit Vouchers Payable $8,000.
C) debit Purchases $8,000; credit Vouchers Payable $7,840; credit Discounts Lost $160.
D) debit Purchases $7,840; credit Vouchers Payable $7,840.

Question

Quizplus · Accepted Answer

Under the net method, the purchase is recorded at the net amount after the discount. The discount is 2% of $8,000, which is $160. Therefore, the net purchase amount is $7,840.

Toy Bots Company Bought $8,000 of Merchandise, Terms 2/10, N/30