Jervis accepts all major bank credit cards, including those issued by Northern Bank (NB), which assesses a 3% charge on sales for using its card. On June 28, Jervis had $3,500 in NB Card credit sales. What entry should Jervis make on June 28 to record the deposit?

Question

Quizplus · Accepted Answer

The entry should reflect the amount received by Jervis, taking into account the 3% charge assessed by Northern Bank. The entry will therefore debit Cash for the net amount received (i.e. $3,500 - $105 = $3,395), debit the Credit Card Expense account for the charge assessed by Northern Bank ($105), and credit Sales for the gross amount of credit sales ($3,500). Therefore, Choice D is the correct entry to record the deposit on June 28.

Jervis Accepts All Major Bank Credit Cards, Including Those Issued