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Homework answers / question archive / Acme Company has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Acme customers' credit card sales receipts
Acme Company has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Acme customers' credit card sales receipts. The credit card company receives 3.5% of card sales as its fee. If Acme has $2,000 in credit card sales, which of the following statements is true?
a. Acme debits Cash $2,000
b. Acme debits Cash $1,930
c. Acme debits Accounts Receivable - Credit Card Co $2,000
d. Acme debits Accounts Receivable - Credit Card Co $1,930
e. Acme credits Sales $1,930
Answer:
First you multiply the total amount of sales by the fee that the company receives
2000*.035 = 70
Then you subtract the 70 from the 2000
2000-70 = 1930
Since you are depositing 2000 worth of sales receipts less the company fee you are debiting cash
The answer is b
Debit Cash 1930
