The journal entry to record the payment within the discount period for goods previously purchased on account causes:
A)equity to decrease.
B)total stockholders' equity to increase.
C)total assets to decrease.
D)total assets to increase.

Question

Quizplus · Accepted Answer

The journal entry includes a debit to Accounts Payable for the original cost (to decrease this liability account)and a credit to Cash for the discounted amount (to decrease this asset account)and Inventory for the amount of the discount (to decrease this asset account).

The Journal Entry to Record the Payment Within the Discount