On February 3, Smart Company sold merchandise in the amount of $5,800 to Truman Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Smart uses the perpetual inventory system and the gross method. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is:
A.
| Cash | 3,920 | |
| Sales discounts | 80 | |
| Accounts receivable | 4,000 |
B.
| Cash | 4,000 | |
| Accounts receivable | 4,000 |
C.
| Cash | 5,684 | |
| Accounts receivable | 5,684 |
D.
| Cash | 5,800 | |
| Accounts receivable | 5,800 |
E.
| Cash | 5,684 | |
| Sales discounts | 116 | |
| Accounts receivable | 5,800 |
Answer: E
Business
You might also like to view...
Define general controls
Business
Which of the following should be undertaken when one receives a viral hoax?
A. Forward it to all contacts in one's address book B. Ask the sender to not send any further e-mails C. Delete it immediately D. Save it on one's desktop
Business
For convenience, pricing objectives can be divided into three categories: profit oriented, sales oriented, and ______.
A. marketing oriented B. status quo C. inventory oriented D. tax oriented
Business
Proper delivery of a car would be satisfied with the delivery of a key
Indicate whether the statement is true or false
Business