On February 3, Smart Company sold merchandise in the amount of $5,800 to Kennedy Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Smart uses the perpetual inventory system and the gross method. Kennedy pays the invoice on February 8 and takes the appropriate discount. The journal entry that Smart makes on February 8 is: Multiple Choice Account Title Debit Credit Cash 5,800 Accounts Receivable 5,800 Account Title Debit Credit Cash 3,920 Sales Discounts 80 Accounts Receivable 4,000 Account Title Debit Credit Cash Accounts Receivable 5,684 5,684
On February 3, Smart Company sold merchandise in the amount of $5,800 to Kennedy Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Smart uses the perpetual inventory system and the gross method. Kennedy pays the invoice on February 8 and takes the appropriate discount. The journal entry that Smart makes on February 8 is: Multiple Choice Account Title Debit Credit Cash 5,800 Accounts Receivable 5,800 Account Title Debit Credit Cash 3,920 Sales Discounts 80 Accounts Receivable 4,000 Account Title Debit Credit Cash Accounts Receivable 5,684 5,684
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On February 3, Smart Company sold merchandise in the amount of $5,800 to Kennedy Company, with credit terms of 2/10, n/30. The cost of the items
sold is $4,00O. Smart uses the perpetual inventory system and the gross method. Kennedy pays the invoice on February 8 and takes the appropriate
discount. The journal entry that Smart makes on February 8 is:
Multiple Choice
Account Title
Debit
Credit
Cash
5,800
Accounts Receivable
5,800
Account Title
Debit
Credit
Cash
Sales Discounts
3,920
80
Accounts Receivable
4,000
Account Title
Debit
Credit
Cash
5,684
Accounts Receivable
5,684
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