Post Pharmacy uses the following journals: sales journal, purchases journal, cash receipts journal, cash payments journal, and general journal. The following two transactions were processed. June 5 Post Pharmacy purchased merchandise priced at $14,000, subject to credit terms of 2/10, n/30. 14 Post Pharmacy paid the net amount due for the merchandise purchased on June 5. In journalizing the June 14 payment, the pharmacy debited Accounts Payable for $14,000 but failed to record the cash discount on the purchase. Cash was properly credited for the actual $13,720 paid. a. In what journals would the June 5 and the June 14 transactions be recorded? b. What procedure is likely to discover the error in journalizing the June 14 transaction?
Post Pharmacy uses the following journals: sales journal, purchases journal, cash receipts journal, cash
payments journal, and general journal. The following two transactions were processed.
June 5 Post Pharmacy purchased merchandise priced at $14,000, subject to credit terms of 2/10, n/30.
14 Post Pharmacy paid the net amount due for the merchandise purchased on June 5.
In journalizing the June 14 payment, the pharmacy debited Accounts Payable for $14,000 but failed to
record the cash discount on the purchase. Cash was properly credited for the actual $13,720 paid.
a. In what journals would the June 5 and the June 14 transactions be recorded?
b. What procedure is likely to discover the error in journalizing the June 14 transaction?
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