Question

Sunland Company made a $24700 sale on account with the following terms: 2/10, n/30. If the company uses the gross method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale?

Answer 1

Answer:

The debit in the journal entry to record sale is Accounts receivable debit by $24700.

Explanation:

The gross method requires a company to record the sale at the gross value i.e. without deducting the discount allowed. Thus, under Gross method, the sale is recorded at its actual value. The entry to record this sale is:

Accounts Receivable    24700 Dr

       Sales revenue              24700 Cr

Thus, in this entry under gross method, the debit is Accounts receivable by $24700.