Gina's Flower Shop received payment in full for goods sold within the discount period on a $1,000 sales invoice, terms 1/10, n/30. Which entry records this transaction?

Question

Quizplus · Accepted Answer

The customer paid within the discount period, which means they received a 1% discount ($1,000 x 1% = $10). Therefore, the entry should reflect a debit to Cash for the discounted amount of $990, a debit to Sales Discount for the discount amount of $10, and a credit to Accounts Receivable for the full amount of $1,000.

Gina's Flower Shop Received Payment in Full for Goods Sold