Answer:
sale on account
Explanation:
When a sales is made and payment is expected at a future date, a sales on account occurs, e.g.:
January 2, 2020, 5,000 units sold at $10 each to ABC company, credit terms 2/10, n/30. Cost of goods sold is $30,000
Dr Accounts receivable 50,000 (5,000 x 10)
Cr Sales revenue 50,000
Dr Cost of goods sold 30,000
Cr Merchandise inventory 30,000
After the invoice is collected, the journal entry would be:
January 30, 2020, invoice collected from ABC company
Dr Cash 50,000
Cr Accounts receivable 50,000
