account Assume a company uses the perpetual Inventory system to record its purchases and sales: 11. When the company records the purchase of merchandise for resale, it will debit the Inventory 12. When the company pays the freight costs (also known as transportation costs) for merchandise it buys, it will debit the We belly account 13. When the company pays the freight costs for merchandise itsells, it will debit the account. Other names for this account are: This account is an on the seller's Income Statement. 14. When a company records a purchase return or a purchase allowance where the purchase was originally on credit, it will debit the account and credit the account 15. What does a buyer call a cash discount offered by the seller to encourage prompt payment of the amount due? 16. If a company pays the amount due within the discount period, indicate below the accounts that the buyer will debit and credit in its journal entry to record the payment Account debited: Accounts credited: and 7. Define Sales Retur Define Sales Allowance. ACC 201 Chapter 5. Learning Notes 1 Fall 2020 Page 3 Assume a company uses the perpetual inventory system to record its purchases and sales: 19. What journal entries should the seller make to record a credit sale? 20. What journal entries should a company make when it records a sales return or a sales allowance? 21. What type of account is Sales Discounts? 22. If a company receives payment from a customer within the sale's discount period indicate below the accounts that the seller will debit and credit in its journal entry to record the receipt. Accounts debited and Account credited