On September 12, Ryan Company sold merchandise in the amount of $5,800 to Johnson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Johnson uses the periodic inventory system and the net method of accounting for purchases. Johnson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Johnson makes on September 18 is:
A.
| Accounts payable | 5,800 | |
| Purchases discounts | 116 | |
| Cash | 5,684 |
B.
| Accounts payable | 4,000 | |
| Merchandise inventory | 80 | |
| Cash | 3,920 |
C.
| Purchases | 5,684 | |
| Cash | 5,684 |
D.
| Accounts payable | 5,684 | |
| Cash | 5,684 |
E.
| Cash | 5,684 | |
| Purchases discounts | 116 | |
| Accounts payable | 5,800 |
Answer: D
You might also like to view...
The ratio of liabilities to stockholders' equity is a measure of the extent of leverage, or proportion of borrowed capital, with which a business operates
a. True b. False Indicate whether the statement is true or false
When using the FIFO method of process costing, beginning inventory costs are excluded from the cost reconciliation
Indicate whether the statement is true or false
Which of the following is an IT general control that would most likely assist an entity whose systems analyst left the entity in the middle of a major project?
A. Input and output validation routines. B. Systems documentation. C. Error controls. D. Processing controls.
A firm may retire an asset from service by trading it in on a new asset. U.S. GAAP and IFRS require that firms record a trade-in that lacks commercial substance at
a. present value of future cash flows. b. replacement value. c. liquidation value. d. the carrying value of the exchanged asset. e. undiscounted cash flows.