Question

Merchandise with a sales price of $5,000 is sold on account with terms 2/10, n/30. The journal entry to record the sale would include aA-debit to Cash for $5,000B-debit to Sales Discounts for $100C-credit to Sales for $4,900D-debit to Accounts Receivable for $4,880

Answer 1

Answer:

B-debit to Sales Discounts for $100

Explanation:

The journal entry is shown below to record the sale:

a. Accounts receivable A/c Dr $5,000

                To Sales revenue $5,000

(Being merchandise is sold on a credit basis)

If the payment is made within 10 days, the journal entry would be

Cash A/c Dr $4,900

Sales discount A/c $100                     ($5,000 x 2%)

            To Accounts receivable A/c $5,000

(Being cash is received)