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4. When Vital Corp. makes a purchase on account with favorable discount terms for early payment, they debit Merchandise Inventory and credit Accounts Payable for
4. When Vital Corp. makes a purchase on account with favorable discount terms for early payment, they debit Merchandise Inventory and credit Accounts Payable for the gross amount of the purchase, without subtracting the discount. If they later pay within the discount period, they credit Merchandise Inventory for the amount they saved through the discount. Explain in your own words how this practice results in an accurate balance for the Merchandise Inventory account
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