Question

On November 10 of the current year, Cherokee Industries sold materials to a customer for $8,000 with credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash discounts. What entry would Cherokee make on November 10? a. Accounts receivable 8,000 Sales 8,000 b. Accounts receivable 7,840 Sales 7,840 c. Accounts receivable 7,840 Cash discounts 160 Sales 8,000 d. Accounts receivable 8,000 Cash discounts 160 Sales 7,840

Answer 1

Answer:

correct option is c. Accounts receivable 7,840 Cash discounts 160 Sales 8,000

Explanation:

given data

sold = $8,000

credit terms = 2/10, n/30

to find out

What entry would Cherokee make on November 10

solution

Journal Entry for record sale on 10th November

Date                account and explanation                    Debit              Credit

Nov 10              Cash                                                   $8000  

                        Account receivable                                                    $7840

                        (8000 × 98%)

                        Sales discount                                                             $160

so correct option is c. Accounts receivable 7,840 Cash discounts 160 Sales 8,000