On October 30, goods with a list price of $10,500 are sold, subject to a trade discount of 25 percent with terms of 2/10, n/30. Payment is received from the customer on November 5. The amount recorded in the Sales Credit column on October 30 is

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Quizplus · Accepted Answer

The amount recorded in the Sales Credit column on October 30 is the price after the trade discount but before any cash discounts. The trade discount is 25% of $10,500, which is $2,625. Therefore, the amount after the trade discount is $10,500 - $2,625 = $7,875. Cash discounts (like the 2/10, n/30 terms) apply only when payment is made, not at the time of sale.

On October 30, Goods with a List Price of $10,500