When a firm is purchasing inventory, and pays early to take advantage of the purchase discount offered by the vendor, that amount is debited to the Inventory account.

Name: When a firm is purchasing inventory, and pays early to take advantage of the purchase discount offered by the vendor, that amount is debited to the Inventory account.
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Question

Quizplus · Accepted Answer

When a firm takes advantage of a purchase discount, the amount of the discount is credited to the Purchases Discount account, not debited to the Inventory account.

When a Firm Is Purchasing Inventory, and Pays Early to Take