Z-Mart buys $500 of merchandise on credit, terms 2/10, n/30, then pays within the discount period.
| Merchandise inventory | 500 | ||
| Accounts payable | 500 |
| Accounts payable | 500 | ||
| Merchandise inventory | 10 | ||
| Cash | 490 |
| Merchandise inventory | 75 | ||
| Cash | 75 |
Under the there is no separate discounts account. A for paying early, a , or a for keeping damaged goods all reduce directly.
means the buyer owns the goods once they leave the seller's dock, and pays the freight — which is added to inventory, not expensed. flips both: the seller owns the goods in transit and expenses the freight instead.