Problem: ABC Company places an order with XYZ Company for $100 on 9/27/15, terms 2/10, n/30, FOB destination, and receives them on 9/30. What journal entry should ABC Company make on 9/30, assuming a periodic inventory system? a. Debit: Inventory $100 and Credit: A/P $100 b. Debit: Purchases $100 and Credit: A/P $100 c. Debit: Inventory $98, Purchase Discounts $2 and Credit: A/P $100 d. Debit: Purchases $98, Purchase Discounts $2 and Credit: A/P $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, FOB destination, and receives them on 9/30. What journal entry should ABC Company make on 9/30, assuming a periodic inventory system?

a. Debit: Inventory $100 and Credit: A/P $100

b. Debit: Purchases $100 and Credit: A/P $100

c. Debit: Inventory $98, Purchase Discounts $2 and Credit: A/P $100

d. Debit: Purchases $98, Purchase Discounts $2 and Credit: A/P $100

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Our tutors have indicated that to solve this problem you will need to apply the Periodic Inventory - Purchasing Summary concept. You can view video lessons to learn Periodic Inventory - Purchasing Summary. Or if you need more Periodic Inventory - Purchasing Summary practice, you can also practice Periodic Inventory - Purchasing Summary practice problems.

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