Assume That the Net Price Method of Recording Purchases Is

Multiple Choice

Assume that the net price method of recording purchases is used and the business uses the perpetual method of inventory recording. Record the purchase of goods for $5000 on credit, on terms of 3/10, n/30. Ignore GST.

A) Debit inventory $5000; credit accounts payable $5000
B) Debit inventory $4850; debit discount allowed $150: credit accounts payable $5000
C) Debit inventory $4850; credit accounts payable $4850
D) Debit purchases $5000; credit accounts payable $4850; credit discount allowed $150