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24 January, 18:19

On November 10 of the current year, Cherokee Industries sold materials to a customer for $8,000 with credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash discounts. What entry would Cherokee make on November 10? a. Accounts receivable 8,000 Sales 8,000 b. Accounts receivable 7,840 Sales 7,840 c. Accounts receivable 7,840 Cash discounts 160 Sales 8,000 d. Accounts receivable 8,000 Cash discounts 160 Sales 7,840

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  1. 24 January, 18:46
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    correct option is c. Accounts receivable 7,840 Cash discounts 160 Sales 8,000

    Explanation:

    given data

    sold = $8,000

    credit terms = 2/10, n/30

    to find out

    What entry would Cherokee make on November 10

    solution

    Journal Entry for record sale on 10th November

    Date account and explanation Debit Credit

    Nov 10 Cash $8000

    Account receivable $7840

    (8000 * 98%)

    Sales discount $160

    so correct option is c. Accounts receivable 7,840 Cash discounts 160 Sales 8,000
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