A company records the following journal entry: debit Cash $1,470,debit Sales Discounts $30,and credit Accounts Receivable $1,500.This means that a customer has taken what percentage cash discount for early payment?
A)1%
B)2%
C)5%
D)10%
E)15%

Question

Quizplus · Accepted Answer

The total amount of the Accounts Receivable was $1,500 but the customer has taken a discount of $30. Therefore, the customer has paid only $1,470 ($1,500 minus $30). So, the percentage of discount was ($30/$1,500) x 100 = 2%.

A Company Records the Following Journal Entry: Debit Cash $1,470,debit