Forever Jewelers uses the gross method and a perpetual inventory system.On April 2,Forever sold merchandise with a cost of $1,900 for $6,300 to a customer on account with terms of 1/15,n/30.Which of the following would be included in the journal entry to record the cash receipt on April 30?
A)Credit to Cash for $6,237
B)Credit to Sales Discounts for $63
C)Debit to Cash for $6,300
D)Debit to Sales Discounts for $63

Question

Quizplus · Accepted Answer

Since the payment was made on April 30, which is beyond the discount period of 15 days, the customer pays the full invoice amount of $6,300. Therefore, the journal entry includes a debit to Cash for $6,300, reflecting the receipt of the full payment without any sales discount.

Forever Jewelers Uses the Gross Method and a Perpetual Inventory