Mars Company purchased $2,500 of merchandise on account, terms 3/10 n/60. If payment was made within the discount period, the entry to record the payment under a periodic inventory system would include a credit to:
A)Cash of $2,425.
B)Inventory of $2,352.
C)Accounts Payable of $2,400.
D)Cash for $2,400.

Question

Quizplus · Accepted Answer

The correct entry includes crediting Cash for $2,425, which is the result of taking the 3% discount on the $2,500 purchase ($2,500 - $75 = $2,425).

Mars Company Purchased $2,500 of Merchandise on Account, Terms 3/10