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1. When goods are purchased with cash, the following entry is necessary:
debit Purchases, credit Cash
2. When goods are purchased on credit, the following entry is necessary:
debit Purchases, credit Accounts Payable
3. When goods are purchased on credit, but are paid back early due to a cash discount incentive, the following entry is necessary:
debit Accounts Payable, credit Cash, and credit Purchases Discount.
debit Purchases, credit Cash
2. When goods are purchased on credit, the following entry is necessary:
debit Purchases, credit Accounts Payable
3. When goods are purchased on credit, but are paid back early due to a cash discount incentive, the following entry is necessary:
debit Accounts Payable, credit Cash, and credit Purchases Discount.
debit Accounts Payable, credit Cash, and credit Purchases Discount.
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