Leo Corp has received an invoice for $6,500 with terms of 3/15, n/45 and uses the net method to record purchases. If Leo pays the invoice on the seventeenth day, the Cash account will be:

A. debited for $6,305

B. credited for $6,500

C. credited for $195

D. credited for $6,305

Question

Business

Gunnar Medina

24 February, 20:09

Leo Corp has received an invoice for $6,500 with terms of 3/15, n/45 and uses the net method to record purchases. If Leo pays the invoice on the seventeenth day, the Cash account will be:

A. debited for $6,305

B. credited for $6,500

C. credited for $195

D. credited for $6,305

+3

Answers (1)

Know the Answer?

Yesenia Hoover · Answer 1

The correct option is B

Explanation:

An amount of $6500 has been received by the Leo Corp. As given in the question that the payment is done on 17th day that is, after the discount period of (15 days), it has to paid full cash on that day. So amount paid will be $6500 on that day. Hence Cash Account will be credited with an amount of $6500.

Therefore, the correct option from the given options is B) that is Credit for $6,500.

Leo Corp has received an invoice for $6,500 with terms of 3/15, n/45 and uses the net method to record purchases. If Leo pays the invoice on the seventeenth day, the Cash account will be:A. debited for $6,305B. credited for $6,500C. credited for $195D. credited for $6,305

Leo Corp has received an invoice for $6,500 with terms of 3/15, n/45 and uses the net method to record purchases. If Leo pays the invoice on the seventeenth day, the Cash account will be:

A. debited for $6,305

B. credited for $6,500

C. credited for $195

D. credited for $6,305