Action Signs recorded credit sales of $10,000 on the gross method. Terms are 2/20, n/30. Select the correct statement about the entry to record this sale.

Question

Quizplus · Accepted Answer

Under the gross method, sales are recorded at the full invoice amount without deducting sales discounts. Therefore, accounts receivable increases by the full sales amount of $10,000, and sales are also recorded at $10,000, not $9,800. Sales discounts are not recorded at the time of sale but are recorded only when a discount is actually taken by the customer.

Action Signs Recorded Credit Sales of $10,000 on the Gross