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13 April, 06:17

On Feb 10, Amara Inc. sold goods to a customer for $8,000 with credit terms 2/10, n/30. The company uses the net method of accounting for sales discounts. What entry would the company make on Mar 10, assuming the correct payment was received on that date?

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  1. 13 April, 06:33
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    The answer is given below;

    Explanation:

    March 10

    Bank Dr.$8,000

    Accounts Receivable Cr.$7,840

    Sales Discount (8,000*2%) Cr.$160

    As the payment was not received within 10 days from the date of sale, therefore 2% discount will be reversed and full payment will be received.
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