Periodic Inventory - Purchase Discounts Video Lessons

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Problem: 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

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Problem Details

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

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