If a company made a $5,500 credit card transaction and the credit card discount was 4%, what is the correct entry to accounts receivable?
A) Dr. Accounts Receivable $5,720
B) Dr. Accounts Receivable $5,280
C) Cr. Accounts Receivable $5,720
D) Cr. Accounts Receivable $5,280

Question

Quizplus · Accepted Answer

To calculate the correct entry to accounts receivable, we need to first calculate the credit card fee. 
Credit card fee = $5,500 x 4% = $220
The company will only receive $5,500 - $220 = $5,280 in their account. 
So, the correct entry will be to debit accounts receivable for $5,280 (the amount the company will receive) and credit the sales account for $5,500 (the original transaction amount). 
Therefore, the correct answer is B) Dr. Accounts Receivable $5,280.

If a Company Made a $5,500 Credit Card Transaction and the Credit