**Question 9:**Which of the following is recorded upon receipt of a payment on April 7, 2021, by a customer who pays a $900 invoice dated March 3, 2021, with terms 2/10, n/60?A. Debit Sales Discounts $18. B. Credit Purchase Discounts $18. C. Credit Accounts Receivable $882. D. Debit Cash $900. ---**Explanation:**This question involves understanding of early payment discount terms and journal entries. The invoice has terms 2/10, n/60, meaning the customer can take a 2% discount if they pay within 10 days; otherwise, the net amount is due in 60 days.- The payment was made on April 7, 2021, which is 35 days after March 3, 2021.- Since the payment was not made within the 10-day discount period, no discount is applied.- The customer pays the full $900 instead of $882 (which would be the amount with the discount).Selecting the correct entry requires knowing these conditions:- **C. Credit Accounts Receivable $882** is incorrect because the payment amount does not reflect a discount.- **A. Debit Sales Discounts $18** and **B. Credit Purchase Discounts $18** are both incorrect because no discount applies.- **D. Debit Cash $900** is correct as the customer paid the full invoice amount with no discount. This reflects the accurate recording of the transaction.

Cash discounts refer to discounts given by sellers to buyers to motivate them to clear their debts…

Which of the following is recorded upon receipt of a payment on April 7, 2021, by a customer who pays a $900 invoice dated March 3, 2021, with terms 2/10, n/60? A. Debit Sales Discounts $18. B. Credit Purchase Discounts $18. C. Credit Accounts Receivable $882. D. Debit Cash $900.

Which of the following is recorded upon receipt of a payment on April 7, 2021, by a customer who pays a $900 invoice dated March 3, 2021, with terms 2/10, n/60? A. Debit Sales Discounts $18. B. Credit Purchase Discounts $18. C. Credit Accounts Receivable $882. D. Debit Cash $900.

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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