Darko Inc.made a $10,000 sale on account with terms: of 1/15,n/30.If the company uses the gross method,which of the following will be included in the journal entry to record the sale on account?

Question

Quizplus · Accepted Answer

The gross method assumes that customers will not take advantage of cash discounts, which means the full amount of the sale will be recorded as revenue. Therefore, we need to credit Sales Revenue $10,000 to record the sale on account. Option A is incorrect because it would be used in the entry to record the payment, not the sale. Option B is incorrect because it assumes the customer takes advantage of the discount, which is not assumed in the gross method. Option D is incorrect because there is no cash involved in the sale – it is on account.

Darko IncMade a $10,000 Sale on Account with Terms: of 1/15,n/30