Acme Company has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Acme customers' credit card sales receipts. The credit card company receives 3.5% of card sales as its fee. If Acme has $2,000 in credit card sales, which of the following statements is true? a. Acme debits Cash $2,000b. Acme debits Cash $1,930c. Acme debits Accounts Receivable - Credit Card Co $2,000d. Acme debits Accounts Receivable - Credit Card Co $1,930e. Acme credits Sales $1,930

Question

Dalia

Business

15 April, 21:41

Acme Company has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Acme customers' credit card sales receipts. The credit card company receives 3.5% of card sales as its fee. If Acme has $2,000 in credit card sales, which of the following statements is true? a. Acme debits Cash $2,000b. Acme debits Cash $1,930c. Acme debits Accounts Receivable - Credit Card Co $2,000d. Acme debits Accounts Receivable - Credit Card Co $1,930e. Acme credits Sales $1,930

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Answers (1)

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Lincoln Schultz · Answer 1

b. Acme debits Cash $1,930

Explanation:

Before passing the journal entry, first we have to do the calculations which his shown below

= Credit card sales - Credit card sales * fee percentage

= $2,000 - $2,000 * 3.5%

= $2,000 - $70

= $1,930

The journal entries are shown below:

Cash A/c Dr $1,930

To Sales A/c $1,930

(Being cash is received after applying the fee percentage)