The entry to record a sale of $2400 with terms of 2/10, n/30 will include a   credit to Accounts Receivable for $2400

Answer)

In the given question Sales of $ 2,400 is made with terms of 2/10, n/30.

The terms 2/10, n/30 Implies that payment for goods purchased will have to done by the buyer within 30 days from the date of purchase. However, if payment is done within 30 days from the date of purchase, a discount of 2% of the invoice value will be allowed.

At the time of recording the sale, the seller is not sure whether the customer will make payment within the discount period. Accordingly, full amount will be recorded as revenue and will be due from the customer. The following journal entry will be made:

Final answer: The correct option is Credit Sales revenue for $ 2,400.

Just for Knowledge:

After recording the sales, two scenarios emerge:

Case – I: If the customer makes the payment within the discount period (i.e. within 10 days from the date of purchase).

In this case discount of 2% of the invoice value, i.e. $ 48 ($ 2,400 X 2%) will be allowed and following journal entry will be done:

Case – II: If the customer doesn’t make the payment within the discount period (i.e. pays beyond 10 days from the date of purchase).

In this case no discount will be allowed and full invoice amount will be received from the customer. The following will be the journal entry: