Retail
Cash Discount on Purchase (2/10, n/30)
Recording the benefit of paying a vendor early to receive a cash discount.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Accounts Payable | Liability (-) | 1,000.00 | - |
| Cash | Asset (-) | - | 980.00 |
| Inventory (or Purchase Discounts) | Asset/Revenue (-) | - | 20.00 |
💡 Accountant's Note
By paying within 10 days, the company saves 2%. This reduces the cost of the inventory (perpetual system) or is recorded as a discount revenue.
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