Heidi's Accessories bought 50 necklaces for $10 each on account.The invoice included a 6% sales tax and payment terms of 2/10,n/30.In addition,5 necklaces were returned prior to payment.The entry to record the purchase would include:

Question

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The cost of the necklaces before sales tax is $500 ($10 x 50). The sales tax is an additional 6% of $500, which is $30. So the total cost of the necklaces is $530. Therefore, the entry to record the purchase would include a debit to Purchases for $530. The Accounts Payable account would also be credited for the same amount since it was purchased on account.

Heidi's Accessories Bought 50 Necklaces for $10 Each on Account