The collection of a $2,000 account within the 2 percent discount period will result in a
A)debit to Sales Discounts for $40.
B)debit to Accounts Receivable for $1,960.
C)credit to Cash for $1,960.
D)credit to Accounts Receivable for $1,960.

Question

Quizplus · Accepted Answer

When a $2,000 account is collected within the 2 percent discount period, a $40 discount is applied. This results in a debit to Sales Discounts for $40, reflecting the reduction in revenue due to the discount.

The Collection of a $2,000 Account Within the 2 Percent