A Company Purchased Inventory for $100,000 on Account and Recorded

question 134

Essay

A company purchased inventory for $100,000 on account and recorded it as follows:

The vendor's invoice showed terms of 3/10,net 30.Give the journal entry for the payment of the invoice seven days after the invoice date,assuming that the vendor uses the perpetual inventory system.

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Definitions:

Raw Materials

Basic materials used in the production process to create goods and services.

T-account

A visual representation of a general ledger account, showing debit and credit transactions and the resulting balance.

Raw Materials

The basic substances used in the production of goods, often processed in several steps before becoming part of the final product.

Advertising Costs

The expenses incurred in promoting a product, service, or business, typically through various media channels.