vinith1331
Jan 8, 2008, 02:29 PM
What is the journal entry for an invoicegetting paid in discount?
pready
Jan 13, 2008, 03:45 PM
There are Two methods for Cash Discounts (Sales Discounts)
Example: Sales of $10,000, terms 2/10, n/30
Method 1 Gross Method
To record original sale:
Debit Accounts Receivable for 10,000
Credit Sales for 10,000
To record full pyament within discount period:
Debit Cash for 9,800
Debit Sales Discounts for 200
Credit Accounts Receivable for 10,000
To record full payment after discount period:
Debit Cash for 10,000
Credit Accounts Receivable for 10,000
Method 2 - Net Method
To record original sale:
Debit Accounts Receivable for 9,800
Credit Sales for 9,800
To record full payment within discount period:
Debit Cash for 9,800
Credit Accounts Receivable for 9,800
To record full payiment after discount period:
Debit Accounts Receivable for 200
Credit Sales Discounts Forfeited for 200
Debit Cash for 10,000
Credit Accounts Receivable for 10,000
ricamee
Jan 14, 2008, 05:26 AM
What is the journal entry for an invoicegetting paid in discount?
Meaning of journalizing
pready
Jan 14, 2008, 08:14 AM
My answers provided are the Journal Entries that will be made for each method used either from the Gross Method or the Net method.