Question

On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. How would Flores record the sale on November 10?A.) Accounts receivable 7,840Sales 7,840B.) Accounts receivable 8,000Sales 8,000C.) Accounts receivable 7,840Cash discounts 160Sales 8,000D.) Accounts receivable 8,000Cash discounts 160Sales 7,840

Answer 1

Answer:                                                                      

C.) Accounts receivable 7,840 Cash discounts 160 Sales 8,000

Explanation:

Assuming for now that credit customer will avail the cash discount, the following journal entry shall be made on November 10 by Flores mills in respect of credit sales made by it.

                                                                   Debit                 Credit

Accounts receivable                                  $7,840                          

Cash discount                                             $160

(8000*2%)

Sales                                                                                      $8,000                                                                        

Based on the above discussion, the answer shall C.) Accounts receivable 7,840 Cash discounts 160 Sales 8,000