A buyer would record a payment within the discount period under a perpetual inventory system by creditingGroup of answer choicesAccounts Payable.Merchandise Inventory.Purchase Discounts.Sales Discounts.
Question
A buyer would record a payment within the discount period under a perpetual inventory system by creditingGroup of answer choicesAccounts Payable.Merchandise Inventory.Purchase Discounts.Sales Discounts.
Solution
Under a perpetual inventory system, when a buyer records a payment within the discount period, they would credit Accounts Payable. Here's a step-by-step explanation:
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The buyer purchases inventory on credit, which increases (debits) Merchandise Inventory and increases (credits) Accounts Payable.
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If the buyer pays within the discount period, they can take advantage of the purchase discount.
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To record this transaction, the buyer would decrease (debit) Accounts Payable for the full amount of the payable.
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They would then credit (decrease) Cash for the amount they actually paid.
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The difference between the full payable and the actual payment (which is the purchase discount they took advantage of) would be credited to Purchase Discounts.
So, the correct answer is Accounts Payable.
Similar Questions
Under a perpetual inventory system, which of the following accounts would be used to record purchases? Group of answer choices Sales Purchases Cost of Sales Inventory
Under the periodic inventory system, the account debited to record the cost of merchandise purchased is*a. Purchasesb. Purchase Discountc. Merchandise Inventoryd. Purchase returns and allowances
The journal entry to record a return of inventory purchased on account under a perpetual inventory system would credit: Group of answer choices Accounts Payable. Purchase Returns and Allowances. Sales Revenue. Inventory.
Under a perpetual inventory system: Group of answer choices accounting records continuously record the movement of inventory as it occurs. increases in inventory resulting from purchases are debited to purchases. there is never a need for a year-end physical count. the account purchase returns and allowances is credited when goods are returned to vendors.
Assuming a periodic inventory system is used, the entry to record a purchase of merchandise on credit includes:Multiple Choicea debit to Purchases and a credit to Accounts Payable.a debit to Accounts Payable and a credit to Purchases.a debit to Purchases and a credit to Accounts Receivable.a credit to Purchases and a credit to Accounts Payable.
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