Question

The Inventory account is used in each of the following except:
the entry to record goods purchased on account.
the return of goods purchased.
payment of freight on goods sold.
payment within the discount period.

Answer 1

Answer:

Option D payment within the discount period

Explanation:

The reason is that the company is already reduced the inventory amount and this transaction requires to reduce the trade receivable account and increase in discount. The entry would be:

Dr Discount account (Expense)  XX

Cr                           Trade Receivable Account XX

The cash received will be separately dealt, I mean the entry will be balancing charge to receivable account.

Dr Cash Account XX

Cr Trade Receivable Account XX