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27 June, 14:58

On November 10 of the current year, Flores Mills sold carpet to a customer for $8,500 with credit terms 2/10, n/30. Flores uses the gross method of accounting for cash discounts.

1. What is the correct entry for Flores on November 10?

Multiple Choice:

A. Accounts receivable 8,500

Sales 8,500

B. Accounts receivable 8,330

Cash discounts 170

Sales 8,500

C. Accounts receivable 8,330

Sales 8,330

D. Accounts receivable 8,500

Cash discounts 170

Sales 8,330

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Answers (1)
  1. 27 June, 18:08
    0
    Cash A/c Dr $8,330

    Sales Discount A/c Dr $170

    To Accounts receivable A/c $8,500

    (Being cash received recorded)

    Explanation:

    The journal entry is shown below:

    Cash A/c Dr $8,330

    Sales Discount A/c Dr $170

    To Accounts receivable A/c $8,500

    (Being cash received recorded)

    The discount would be

    = Accounts receivable * percentage given

    = 8,500 * 2%

    = $170

    And, The remaining amount would be debited to the cash account.

    Note: This is the answer but the same is not provided in the given options
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