On November 10 of the current year, Flores Mills provides services to a customer for $8,000 with credit terms 2/10, n/30. The customer made the correct payment on December 5. How would Flores record the collection of cash on December 5?

A. Cash 7,840

Accounts Receivable 7,840

B. Cash 7,840

Sales Discounts 160

Accounts Receivable 8,000

C. Cash 7,840

Sales Revenue 160

Accounts Receivable 8,000

D. Cash 8,000

Accounts Receivable 8,000

D. Cash 8,000

Accounts Receivable 8,000

Explanation:

We should analize the credit terms:

2/10 - -> the purchases is subject to a 2% discount if payment made within 10 days

n/30 - -> the purchase will be settle at nominal within first 30 days

On December 5th the payment is within the first 30 days, so the amount to paid is the nominal amount: 8,000

The business will receive Cash for 8,000 and it will credit accounts receivable to reflect the payment of the customer.