Under the perpetual inventory system, a company purchases merchandise on terms 2/10, n/30. The entry to record the purchase will include a debit to Cash and a credit to Sales.

Perpetual Inventory

An inventory system that updates item records continuously as transactions occur.

2/10, n/30

A common credit term indicating that a buyer can take a 2% discount on the invoice price if payment is made within 10 days; otherwise, the net amount is due in 30 days.