Big Stores, Inc., accepts credit cards.The clearinghouse collection fee is 3%.If credit card sales are $75, 000 for the current month, the correct summary journal entry is

Question

Quizplus · Accepted Answer

The correct entry accounts for the sales amount ($75,000), the clearinghouse collection fee (3% of $75,000 = $2,250), and the net amount received ($75,000 - $2,250 = $72,750). This reflects the actual cash received (Accounts Receivable) and the expense incurred (Credit Card Expense) due to the fee, while still recording the total sales amount.

Big Stores, Inc Accounts Receivable 72,750 Sales 72,750\begin{array}{cc}\text { Accounts Receivable } & 72,750 \\\text { Sales } & 72,750\end{array} Accounts Receivable Sales ​72,75072,750​

Big Stores, Inc $\begin{array}{cc}\text { Accounts Receivable } & 72,750 \\\text { Sales } & 72,750\end{array}$