When a credit sale is made with terms of 2/10,n/30 on May 10 and the customer's check is received on May 19,which of the following is true about the May 19 journal entry?
A)The debit to cash will equal the credit to accounts receivable because the discount was recorded on May 10.
B)There will be a debit to sales discounts on May 10.
C)The debit to cash will be less than the credit to accounts receivable on May 19.
D)There will be a credit to sales discounts on May 19.

Question

Quizplus · Accepted Answer

Since the customer's check was received on May 19, which is 9 days after the initial credit sale on May 10, the customer did not take advantage of the 2% discount for paying within 10 days. Therefore, the cash received will be less than the full amount owed, resulting in a debit to cash that is less than the credit to accounts receivable. There will be no entry to sales discounts on May 19 since the discount was not taken.

When a Credit Sale Is Made with Terms of 2/10,n/30