Concept: Periodic Inventory: Purchase Discounts7m
Problem: On April 12, a company purchased goods worth $14,000 on account with terms of 2/15 net 30. The company paid its supplier on April 25. In a periodic system, the journal entry to record the payment on April 25 would include:4m
Which of the following is a contra revenue account?
a. Accumulated depreciation
b. Sales returns and allowances
c. Allowance for bad debts
d. Purchase discounts
ABC Company places an order with XYZ Company for $100 on 9/27/15, terms 2/10, n/30. ABC pays for the order on 10/5. What journal entry should XYZ Company make on 10/5?
a. Debit: Cash $100 and Credit: Sales $100
b. Debit: Cash $100 and Credit: A/R $98 and Sales discounts $2
c. Debit: Cash $98 and Credit: A/R $98
d. Debit: Cash $98 and Sales discounts $2 and Credit: A/R $100
On June 18, Alexis Inc. purchased $600 of merchandise with credit terms 0.5/15, n/60 from Nike. If Alexis makes a payment on July 05, it will result in an entry from Nike of
a. debit to Cash for $597.
b. credit to Accounts Receivable for $600.
c. credit to Cash for $600.
d. debit to Sales Discounts for $3.
On September 12, J Company purchased merchandise in the amount of $5,800 from V Company on credit with terms of 2/10, n/30. J Company receives a $800 allowance on September 15 and pays the balance of the invoice on September 28.
If J company uses the periodic inventory method, the credit in the September 15 entry would be:
a. Purchase returns and allowances
b. Merchandise Inventory
c. Purchase discounts