Merchandise was sold on credit for $30,000, terms 3/15, n/30. Which of the following journal entry descriptions correctly describes the cash collection?

Question

Quizplus · Accepted Answer

When the payment is received within the discount period, a sales discount, $900, is recorded via a debit to sales discounts, cash is debited for the selling price less the discount [$30,000 - $900], and accounts receivable is credited for the selling price, $30,000. Therefore, option B is the correct choice. Option A is incorrect because the accounts receivable should be credited for the total amount of $30,000, not $25,500. Option C is incorrect because the accounts receivable should be credited for $30,000, not $29,100. Option D is incorrect because it doesn't take into account the sales discount.

Merchandise Was Sold on Credit for $30,000, Terms 3/15, N/30