what is the supply expense for the period?\n7. abc corporation has received an invoice for $4,500 with terms…

what is the supply expense for the period?\n7. abc corporation has received an invoice for $4,500 with terms of 3/15, n/50. if abc pays the invoice on the seventeenth day, what is the effect on the cash account and will the cash account be debited or credited?

what is the supply expense for the period?\n7. abc corporation has received an invoice for $4,500 with terms of 3/15, n/50. if abc pays the invoice on the seventeenth day, what is the effect on the cash account and will the cash account be debited or credited?

Answer

Explanation:

Step1: Analyze invoice terms

The terms 3/15, n/50 mean a 3% discount if paid within 15 days, net amount due within 50 days. ABC pays on the 17th day, so no discount is taken.

Step2: Determine cash - account effect

When paying an invoice, cash is decreased. A decrease in an asset account (Cash is an asset) is recorded as a credit. The amount paid is the full invoice amount of $4,500.

Answer:

The cash account is decreased by $4,500 and is credited.