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    abrewington's Avatar
    abrewington Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Nov 28, 2007, 09:29 PM
    What accounts to be used and for what amounts
    Received a shipment of Cruze Faceshields for inventory. All merchandise purchases by Gold Run Snowmobile are recorded net. Invoices s4101 from swift, incorporated shows the list price of the merchandise at 150.00. Cash discounted terms of 1/10, n/30 are offered and the merchandise is shipped FOB destination.
    terryg752's Avatar
    terryg752 Posts: 197, Reputation: 4
    Junior Member
    		  
    #2

    Dec 1, 2007, 05:46 AM
    I am not sure but I think it will be like this:

    Upon receipt of shipment and invoice, you will

    Debit the Inventory (Asset A/C)

    Credit Accounts payables (Liability A/C)

    Use the list price for all the above.

    When you actually pay:

    Debit the Accounts payables by same amount as above

    Credit Cash with the amount actually paid

    Credit Discounts Received account (Revenue account) with the amount of discount actually received.
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