Acme Company has an agreement with a major credit card company that calls for cash to be received immediately upon deposit of Acme customers' credit card sales receipts.The credit card company receives 3.5% of card sales as its fee.If Acme has $2,000 in credit card sales,which of the following statements are true?
A)Acme debits Cash $2,000.
B)Acme debits Cash $1,930.
C)Acme debits Accounts Receivable - Credit Card Co $2,000.
D)Acme debits Accounts Receivable - Credit Card Co $1,930.
E)Acme credits Sales $1,930.

Question

Quizplus · Accepted Answer

Acme debits Cash $1,930 because they receive the full amount of credit card sales minus the 3.5% fee charged by the credit card company. Therefore, the entry would be: Cash $1,930 and Sales $2,000. No account would be debited or credited to reflect the credit card company's fee.

Acme Company Has an Agreement with a Major Credit Card