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91 D A B C ABC Co sold goods with a list price of $4,500 to Black which was subject to trade discount of 5% and early settlement discount of 4% if the invoice was paid within 7 days. The normal credit period available to credit customers is 30 days from invoice date. At the point of sale, Black was expected to take advantage of the early settlement terms offered. If, on this occasion, Black did not pay within 7 days and was not eligible for the settlement discount, what accounting entries should be made by ABC Co to record settlement of the amount outstanding? Debit Cash $4,104, Debit Revenue $396 and Credit Trade receivables $4,500 Debit Cash $4,275, Debit Discount received $171 and Credit Trade receivables $4,104 Debit Cash $4,275 and Credit Trade receivables $4,275 Debit Cash $4,275, Credit Trade receivables $4,104 and Credit Revenue $171

91 D A B C ABC Co sold goods with a list price of $4,500 to Black which was subject to trade discount of 5% and early settlement discount of 4% if the invoice was paid within 7 days. The normal credit period available to credit customers is 30 days from invoice date. At the point of sale, Black was expected to take advantage of the early settlement terms offered. If, on this occasion, Black did not pay within 7 days and was not eligible for the settlement discount, what accounting entries should be made by ABC Co to record settlement of the amount outstanding? Debit Cash $4,104, Debit Revenue $396 and Credit Trade receivables $4,500 Debit Cash $4,275, Debit Discount received $171 and Credit Trade receivables $4,104 Debit Cash $4,275 and Credit Trade receivables $4,275 Debit Cash $4,275, Credit Trade receivables $4,104 and Credit Revenue $171

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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91 D A B C ABC Co sold goods with a list price of $4,500 to Black which was subject to trade discount of 5% and early settlement discount of 4% if the invoice was paid within 7 days. The normal credit period available to credit customers is 30 days from invoice date. At the point of sale, Black was expected to take advantage of the early settlement terms offered. If, on this occasion, Black did not pay within 7 days and was not eligible for the settlement discount, what accounting entries should be made by ABC Co to record settlement of the amount outstanding? Debit Cash $4,104, Debit Revenue $396 and Credit Trade receivables $4,500 Debit Cash $4,275, Debit Discount received $171 and Credit Trade receivables $4,104 Debit Cash $4,275 and Credit Trade receivables $4,275 Debit Cash $4,275, Credit Trade receivables $4,104 and Credit Revenue $171
Transcribed Image Text:91 D A B C ABC Co sold goods with a list price of $4,500 to Black which was subject to trade discount of 5% and early settlement discount of 4% if the invoice was paid within 7 days. The normal credit period available to credit customers is 30 days from invoice date. At the point of sale, Black was expected to take advantage of the early settlement terms offered. If, on this occasion, Black did not pay within 7 days and was not eligible for the settlement discount, what accounting entries should be made by ABC Co to record settlement of the amount outstanding? Debit Cash $4,104, Debit Revenue $396 and Credit Trade receivables $4,500 Debit Cash $4,275, Debit Discount received $171 and Credit Trade receivables $4,104 Debit Cash $4,275 and Credit Trade receivables $4,275 Debit Cash $4,275, Credit Trade receivables $4,104 and Credit Revenue $171
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