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

Question

Business

Kristina Gilbert

3 September, 09:05

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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Answers (1)

Know the Answer?

Clare Barnes · Answer 1

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