Prepare the Necessary Journal Entries to Record the Following Transactions

question 109

Essay

Prepare the necessary journal entries to record the following transactions, assuming a periodic inventory system:
(a) Purchased $400,000 of merchandise on account, terms 2/10, n/30.
(b) Returned $40,000 of damaged merchandise for credit.
(c) Paid for the merchandise purchased within 10 days.

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Definitions:

Legally Act

To perform actions or conduct oneself in a manner that is in accordance with the law.

Agent

A person authorized to act on behalf of another person (the principal), engaging in legal acts or transactions.

Negligence

A failure to behave with the level of care that a reasonably prudent person would have exercised under the same circumstances, resulting in harm or injury.

Tort Liability

Legal responsibility arising from civil wrongs not arising out of contractual obligations, resulting in harm or injury to another.