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    MUNA2NE1's Avatar
    MUNA2NE1 Posts: 2, Reputation: 1
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    #1

    May 20, 2012, 05:50 PM
    Ask expert accounting help free
    A company pays an invoice early and takes 4% off the original invoice price. The account to be credited for this amount under a perpetual inventory is
    A. Cash
    B. Discount
    C. Account payable
    D. Inventory
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    May 20, 2012, 07:27 PM
    Quote Originally Posted by MUNA2NE1 View Post
    A company pays an invoice early and takes 4% off of the original invoice price. The account to be credited for this amount under a perpetual inventory is
    A. Cash
    B. Discount
    C. Account payable
    D. Inventory
    What do you think?
    MUNA2NE1's Avatar
    MUNA2NE1 Posts: 2, Reputation: 1
    New Member
     
    #3

    May 20, 2012, 08:00 PM
    I think is C. but not sure can please tell me which one is right this is due today
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #4

    May 20, 2012, 09:00 PM
    Wrong, the account to be credited is discount (received)

    Accounts payable was debited with the full amount when the account was paid, no amount remains owing.
    Ie the three accounts involved are
    Accounts payable gross amount of the account Debit
    Discount credit
    Cash net amount credit

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