Cash (2) (4) Accounts Payable 1,980 150 (3) (1) 11,880 13,860 11,880 (4) Inventory (1) 13,860 (3) 1,980 (2) 150

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Purchase-related transactions
The debits and credits from four related transactions, (1) through (4), are presented in the following T accounts. Assume that the freight terms were FOB shipping point and that the credit terms were 1/10, n/30.

a. Describe each transaction.
b. Determine the invoice amount of the merchandise that was returned in (3).

Cash
(2)
(4)
Accounts Payable
1,980
150
(3)
(1)
11,880
13,860
11,880
(4)
Inventory
(1)
13,860 (3)
1,980
(2)
150
Transcribed Image Text:Cash (2) (4) Accounts Payable 1,980 150 (3) (1) 11,880 13,860 11,880 (4) Inventory (1) 13,860 (3) 1,980 (2) 150
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