Question

QUESTION 3 2 points Save Answer Buy trading stock and paid R13 500 after receiving 10% discount. Choose the correct entry to account for the inventory: Debit Inventory R15 000 Credit Bank R15 000 Debit Inventory R13 500 and Debit Trade Discount R1 500 Credit Bank R15 000 O Debit Inventory R13 500 Credit Bank R13 500 O Debit Inventory R15 000 Credit Bank R13 500 and credit Trade discount received R1 500

Answer 1

Correct Option is C

Journal Entry
Date	Account Titles and Explanation	Debit	Credit
	Inventory	13,500
	Bank		13,500
(to record payment made for inventory)

Rule used:     

Debit: - what comes in (stock or inventory)

            Credit: - the giver (representative personal account or bank)

*Trade discount is the advantage of purchasing in bulk. Cash discount is the advantage of making early cash payment. Trade discount is not recorded in the books of accounts.