The terms of an invoice are 3/10, n/25 this means that a <u>discount of 3% is allowed if the invoice is paid within 10 days</u> of the invoice date.
3/10, n/25 this means that a 10% cash discount is available if the invoice is paid within 10 days, pay the net price if covered within 25 days of the invoice date. Discounts are reductions of the normal fee of a product or service with the purpose to obtain or growing income.
Trade discount refers to the deduction given by using the supplier to the purchaser within the catalog price of the goods. Cash discount implies the allowance granted to the clients by means of the supplier on the billing fee, for immediate payment.
A cash discount also referred to as a purchase cut price or income discount, is a reduction in the purchase fee of an excellent because of an early cash charge. In different words, the seller of products is inclined to lessen the fee of the goods if the purchaser is inclined to pay for the coolest in advance.
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Answer:
Date Account Details Debit Credit
Sept. 30, 2020 Accounts Receivable $5,000
Sales $5,000
Date Account Details Debit Credit
Sept. 30, 2020 Cost of Goods Sold $2,000
Inventory $2,000
Answer:
The journal entry to record this note collection carried out by the bank should be:
Dr Cash 21,200
Cr Notes receivable 20,000
Cr Interest revenue 1,200
Explanation:
Notes receivable is an asset account and it probably represented a sale made on credit by the company, so when it was collected, the amount should decrease and that is done by crediting it.
On the other hand, since only $20,000 belonged to the note, the rest ($1,200) must be recorded as interest revenue. Revenues are always credited.
