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Joe Company sold merchandise with an invoice price of $1,000 to Gibbs, Inc., with terms of 2/10, n/30. Which of the following is the correct entry to record the payment by Gibbs within the 10 days if the company uses the periodic inventory system and the gross method to record purchases?

a. Cash 980 Sales Discount 20 Accounts receivable 1,000

b. Accounts Payable 1,000 Cash 980 Purchases Discounts 20

c. Accounts Payable 1,000 Cash 1,000

d. Purchases 980 Cash 980

e. None of the above is correct.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M996714

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