Park,Inc.purchased merchandise from Jay Zee Music Company on June 5,2017.The goods were shipped the same day.The merchandise's selling price was $15,000.The credit terms were 1/10,n/30.The shipping terms were FOB shipping point.Park received the merchandise on June 10,2017.Park paid the amount due on June 13,2017.
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If Park uses the periodic inventory system,the effect of recording the payment on June 13,2017,will include a(n)

Question

Quizplus · Accepted Answer

When Park received the merchandise on June 10th, a credit purchase was recorded in the Accounts Payable account for $15,000. When the payment is made on June 13th, it will result in a decrease to the Accounts Payable account for $15,000. Therefore, the answer is D. There is no effect on Purchases or Inventory under the periodic inventory system as these accounts are only updated at the end of an accounting period. The decrease in Cash would be recorded separately.

Park,IncPurchased Merchandise from Jay Zee Music Company on June 5,2017