Farthington Soccer Supplies purchases merchandise from a supplier on credit, terms 2/10, n/30 for $16,000....
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Accounting
Farthington Soccer Supplies purchases merchandise from a supplier on credit, terms 2/10, n/30 for $16,000. Assume the company uses a perpetual inventory system, and records purchases using the gross method. When recording the purchase transaction in its purchases journal, Farthington would enter:
Multiple Choice
$16,000 in the Accounts Payable Cr. column and $16,000 in the Inventory Dr. column.
$16,000 in the Accounts Payable Cr. column and $16,000 in the Supplies Dr. column.
$16,000 in the Inventory Dr. column, $15,680 in the Accounts Payable Cr. column, and $320 in the Purchase Discount Cr. column.
$15,680 in the Inventory Dr. column and $15,680 in the Accounts Payable Cr. column.
$16,000 in the Other Accounts Dr. column and $16,000 in the Inventory Cr. column.
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