Reference no: EM132739208

Problem 1: Which of the following statements is correct about the credit period?

a. If a customer purchases goods within the credit period, a cash discount will be allowed to the customer.

b. If a customer settles the payment within the credit period, a cash discount will be allowed to the customer.

c. It refers to the period in which customers must settle their debts due.

d. It refers to the period in which customers need to settle one-third of the debts in order to avoid further interests charged.

Problem 2: The journal entry for the purchase of inventory on account is:

a. debit inventory, credit accounts payable

b. debit accounts payable, credit inventory

c. debit inventory, credit accounts receivable

d. a. debit inventory, credit cash