Question

Which of the following is recorded upon receipt of a payment on April 7, 2021, by a customer who pays a $900 invoice dated March 3, 2021, with terms 2/10, n/60? Debit Sales Discounts $18. Credit Purchase Discounts $18. Debit Cash $900. Credit Accounts Receivable $882

Answer 1

Answer:

Debit Cash $900

Explanation:

The journal entry is as follows:

On April 7, 2021

Cash A/c Dr $900

     To Account receivable A/c $900

(Being the cash is received)      

Since the cash is received so we debited the cash account and credited the account receivable as it reduces the account receivable balance. No discount is given as the party has not paid the payment within 10 days