Assuming a periodic inventory system is used, purchases of supplies on credit th

Question

Assuming a periodic inventory system is used, purchases of supplies on credit that are to be used in the business are debited to accounts receivable accounts payable purchases supplies Assuming a periodic inventory system is used, the journal entry to record the purchase of merchandise on account for $2,750 with freight of $125 prepaid and added to the invoice is debt Purchases $2,750 credit Account Payable $2,750 debt Accounts Payable $2,875 credit Freight in $125, credit Purchases $ 2,750 debt Accounts Receivable $2,875 credit Sales $2,875 Credit terms of 2/10, n/45 mean payment in full is due 2 days after date of the invoice if the invoice is paid within 10 days of its date, a 2% discount may be taken otherwise the total amount is due in 45 days if the invoice is paid within 10 days of its date a 2% discount may be taken otherwise the total amount is due in 35 days only that payment in full is due 45 days after date of the invoice.

Explanation / Answer

Q14    Supplies Q15 Debit Purchases 2750, Debit freight in 125, Credit Accounts Payable 2875 Q16 If the invoice is paid within 10 days of its date , a 2 % discount may be taken otherwise total amount is due in 45 days

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