The journal entry to record a sales discount taken by a customer would include:
A)A debit to Accounts Receivable and Sales Discount
B)A debit to Cash and Sales Discount
C)A debit to Sales and a credit to Accounts Receivable
D)A debit to Cash and a credit to Sales Discount

Question

Quizplus · Accepted Answer

The correct journal entry to record a sales discount taken by a customer when they pay their invoice includes debiting Cash for the amount received, which is less than the original invoice due to the discount, and debiting Sales Discount for the amount of the discount given. This recognizes the reduced cash inflow and the expense of the sales discount.

The Journal Entry to Record a Sales Discount Taken by a Customer