X-Mart uses the perpetual Inventory system to account for its merchandise. On May 1, it sold $1,400 of merchandise on credit with terms of j/10,n/ 40

X-Mart uses the perpetual Inventory system to account for its merchandise. On May 1, it sold $1,400
of merchandise on credit with terms of j/10,n/ 40. Demonstrate the required journal entry to record
the receipt of payment on May 25 by selecting all of the correct actions below. (Check all that apply.)

Credit Sales Discounts $14.
Credit Accounts Receivable $1,400.
Debit Sales Discounts $14.
Credit cash $1,400.
Debit cash $1,400.
Debit Accounts Receivable $1,400.


On June 5, X-Mart purchased $400 of merchandilse with terms of 2/10,n/30. If payment is made on
June 11, calculate the purchase discount that may be taken by X-Mart.

$8
$40
$0
$12


Jello's Market purchased $1,000 of goods on account with terms of 2/10,n/30. They returned $200
of the goods due to defect the next day. If the company pays for the purchase within the discount
period and uses the perpetual inventory system, the required journal entry to record the payment
would:

debit Accounts Payable $800; credit Merchandise Inventory $16; and credit Cash $784
debit Accounts Payable $1,000; credit cash 980; and credit Purchase Discounts $20
debit Accounts Payable $800; credit Cash .$780; and credit Merchandise Inventory $20
debit Accounts Payable $800 and credit cash $800