The entry to record the receipt of payment within the discount period on a sale of $2,000 with terms of 2/10, n/30 will include a credit to
A) Sales Discounts for $40.
B) Cash for $1,960.
C) Accounts Receivable for $2,000.
D) Sales Revenue for $2,000.

Question

Quizplus · Accepted Answer

The entry will include a credit to Accounts Receivable for the full amount of $2,000, as this is the amount initially recorded as a receivable. The discount of $40 is recorded separately as a debit to Sales Discounts, and Cash is debited for $1,960.

The Entry to Record the Receipt of Payment Within the Discount