**Example Journal Entry Question**---**Scenario:** Merchandise with a sales price of $5,700 is sold on account with terms 2/10, n/30. The journal entry to record the sale would include:- **a.** Debit to Accounts Receivable for $5,566- **b.** Credit to Sales for $5,586- **c.** Debit to Sales Discounts for $114- **d.** Debit to Cash for $5,700**Explanation:** When a company sells merchandise on credit, it must accurately record the transaction in its financial statements. The terms "2/10, n/30" indicate that the buyer can take a 2% discount if they pay within 10 days, otherwise the net (full) amount is due in 30 days.- **Accounts Receivable** is debited to reflect the amount the customer owes.- **Sales Discounts** are recorded if the customer takes the early payment discount.- **Cash** is recorded when payment is received, if applicable. Selections do not directly indicate correct choices for the scenario.This exercise helps in understanding basic accounting principles related to sales and their financial implications.

Discount = Sales x cash discount rate = $5,700 x 2% = $114

Answered: Merchandise with a sales price of…

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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The entry to record the sale of $20,000 of merchandise on account with cost of $14,000, would include: a. credit to accounts receivable for $14,000 b. debit to accounts receivable for $20,000 c. debit to cost of goods sold for $20,000 d. credit to inventory for $20,000
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Journalize the following merchandise transactions: (If an amount box does not require an entry, leave it blank.) a. Sold merchandise on account, $12,900, with terms 2/10, net 30. The cost of the merchandise sold was $8,385. Sale Cost b. Received payment within the discount period.
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prepare a journal entry to record transaction Buyer buys merchandise for 3,000, credit terms 2/10 n/30. Merchandise cost 1800
Merchandise with a list price of $3,900 and costing $2,000 is sold to a customer (MJ Co.) on account, subject to the following terms: 2/10, n/30. The seller (Stone Co.) prepays the transportation costs of $50, shipping terms are FOB Destination. The correct payment amount is received from the buyer within the discount period. Record the foregoing transactions of the SELLER (Stone Co.) in the sequence indicated below (omit the 4th journalizing step of providing an explanation): (a) Sold the merchandise, recognizing the sale and cost of merchandise sold. (b) Paid the $50 transportation charges. (c) Received payment from the customer. Record the foregoing transactions of the BUYER (MJ Co.) in the sequence indicated below (omit the 4th journalizing step of providing an explanation): (d) Bought the merchandise. (e) Sent payment to the vendor. JOURNAL Date Post.…

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Merchandise with a sales price of $5,700 is sold on account with terms 2/10, n/30. The journal entry to record the sale would include a Oa. debit to Accounts Receivable for $5,566 Ob. credit to Sales for $5,586 Oc. debit to Sales Discounts for $114 Od. debit to Cash for $5,700