The entry to record the receipt of payment within the discount period on a sale of $2,500 with terms of 2/10, n/30 will include a credit to A) Sales Discounts for $50

Marketing Dec 22, 2020

The entry to record the receipt of payment within the discount period on a sale of $2,500 with terms of 2/10, n/30 will include a credit to

A) Sales Discounts for $50.

B) Cash for $2,450.

C) Accounts Receivable for $2,500.

D) Sales Revenue for $2,500.

Expert Solution

Answer: C) Accounts Receivable for $2,500.

Terms 2/10, n/30 means that there will be a 2% discount if the payment is made within 10 days from date of purchase, and the deadline for payment without discount is within 30 days. The journal entry to record the receipt of payment within the discount period on the sale is as follows:

Accounts	Debit	Credit
Cash	$2,450
Sales Discount ($2,500 * 2%)	$50
Accounts Receivable		$2,500

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote