Physical Inventory Count, Ownership of Goods, and Consigned Goods 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, FOB destination, receives them on 9/30 and pays on 10/5. What journal entry should ABC Company make on 10/5, assuming a perpetual inventory system? a. Debit: A/P $100 and Credit: Cash $100 b. Debit: A/p $98 and Credit: Cash $98 c. Debit: A/P $100 and Credit: Cash $98 and Purchase Discounts $2 d. Debit: $100 and Credit: Cash $98 and Inventory $2

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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, receives them on 9/30 and pays on 10/5. What journal entry should ABC Company make on 10/5, assuming a perpetual inventory system?

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

b. Debit: A/p $98 and Credit: Cash $98

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

d. Debit: $100 and Credit: Cash $98 and Inventory $2

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