The inventory received on a purchase order was paid for within 20 days of the purchase. Payment terms on the invoice were 2% 10, Net 30.

Choose the correct accounting entries:

1. DR A/C #20000 Accounts Payable
CR A/C #10100 Checking
CR A/C #54599 Less Discounts Taken

2. DR A/C #20000 Accounts Payable
CR A/C #50100 Cost of Goods Sold

3. DR A/C #20000 Accounts Payable
CR A/C #10100 Checking

4. DR A/C #50100 Cost of Goods Sold
CR A/C #10100 Checking

The question relates to accounting entries for inventory purchase, payment, and early payment discount. Given the payment terms of 2% 10, net 30, the company qualifies for a 2% discount since it made the payment within 20 days. Therefore, the correct set of entries is the first one, reflecting the payment from checking account and the taken discount.

Explanation:

The question seems to be about accounting entries related to the purchasing, payment, and discounts associated with inventory. When you receive inventory on a purchase order and pay within the specified discount period, you're entitled to take a purchase discount. In this case, the payment terms on the invoice are 2% 10, net 30, meaning you'll get a 2% discount if you pay within 10 days, otherwise the full amount is due in 30 days.

As you've paid within 20 days, you're eligible for the discount. Here's how the transaction would be recorded using the correct entries:

DR A/C #20000 Accounts Payable
CR A/C #10100 Checking
CR A/C #54599 Less Discounts Taken

The first two accounts reflect that you've paid your account payable from your checking account. The last entry, 'Less Discounts Taken', reflects the discount you've received by paying early. Hence, the correct set of entries would be the first one.

Learn more about Payment terms and purchase discount here:

https://brainly.com/question/36687887

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