? l e Secure l https://newconnec nect html Ch. 7 Assessment Help Save &Exit; s 2

Question

? l e Secure l https://newconnec nect html Ch. 7 Assessment Help Save &Exit; s 2 On November 10 of the current year, Cherokee Industries sold materials to a customer for $8,000 with credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash discounts What entry would Cherokee make on December 10, assuming the correct payment was received on that date? 025904 Multiple Choice Cash 8,000 Accounts receivable 8,8e0 Accounts recelvable Discounts revenue Accounts receivable O Type here to search

Explanation / Answer

In Net method of accounting for cash discount discount is calculated at the time of taking cash if applicable. So at the time of sales net sales are shown in account recievable Payment of the same is received after 10 days it means ther is no discount is given to customer and received the full amount So Journal Entry of the same is pass as below, Particulars Debit Amount Credit Amount Cash $                           8,000      To Account Receivable $                             7,840      To Discount revenue $                                 160 Answer = Option 2 (As above)

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