Credit terms of 2/10. n/30 imply that the seller offers the purchaser a 2% cash discount if the amount is paid within 10 days of the invoice date. otherwise, the full amount is due in 30 days. An advantage of the weighted average inventory method is that it tends to smooth out erratic changes in costs. The purchases journal is used to record cash purchases of merchandise. Revenue and expense accounts are permanent (real) accounts and should not be closed at the end of the accounting period. The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination. Merchandise inventory consists of products that a company acquires to resell to customers. ALIBABA established a petty cash fund of exist500 on September 1. On October 1, BAIDU sold merchandise in the amount of exist8,000 to ALIBABA with credit terms of 2/10, n/30. The cost of the items sold is exist5,000. Prepare the journal entry that BAIDU makes on October 1. ALIBABA pays for the invoice on October 8 to BAIDU, and takes the discount. Prepare the journal entry that BAIDU makes on October 8. Please fill in the blanks with the right numbers or words on the table. The July 30 bank statement indicated a balance of exist8.000 The cash general ledger account on that date shows a balance of exist7.000. Additional information necessary for the reconciliation is shown as follow