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Merchandise is sold on account on January 16, terms 2/10, n/30, and recorded by debiting Accounts...

Merchandise is sold on account on January 16, terms 2/10, n/30, and recorded by debiting Accounts Receivable and crediting Sales for $2,000. If payment occurs on January 21, the journal entry would include a credit to: Question 2 options:

Cash for $1,960 Accounts

Receivable for $2,000 Accounts

Receivable for $1,960

Sales Discounts for $40

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Homework Answers

Answer #1

Answer: Receivable for $2,000 Accounts

Explanation

The payment occurs on January 21 ie, with in 10 days from the date of sale (January 16). Thus, customer will receive a 2% discount.

The journal entry is:

GENERAL JOURNAL DEBIT ($) CREDIT ($)
Cash (Balancing figure)        1,960.00
Sales Discount (2,000 x 2%)            40.00
Receivable account           2,000.00

Therefore, Receivable for $2,000 Accounts is to be credited.

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