Lee Enterprises received payment within the discount period from a customer who had purchased merchandise on account. The sales invoice was for $2,000, and credit terms were 3/15 n/30. In the cash receipts journal, $1,940 will appear under the:
A)sales revenue credit column.
B)accounts receivable credit column.
C)cash debit column.
D)cash credit column.

Question

Quizplus · Accepted Answer

The $1,940 will appear under the cash debit column because this amount represents the cash received from the customer after taking the discount (3% of $2,000 = $60; $2,000 - $60 = $1,940). The cash receipts journal records increases in cash, hence a debit entry.

Lee Enterprises Received Payment Within the Discount Period from a Customer