Question

Owens Jewelers uses the perpetual inventory system. On April​ 2, Owens sold merchandise with a cost of​ $2,500 for​ $7,000 to a customer on account with terms of​ 2/15, n/30. Which of the following journal entries correctly records the sales​ revenue?

Answer 1

The following journal entries correctly records the sales​ revenue:

1.

Debit Accounts Receivable $7,000

Credit Revenue $7,000

2.

Debit Cost of good sold $2,500

Credit Merchandise $2,500

Step-by-step explanation:

The terms of​ 2/15, n/30 means 2% discount for the payment within 15 days and the full amount to be paid within 30 days.

When Owens sold merchandise, there are 2 entries record the sales:

1. Debit Cost of good sold $2,500

Credit Merchandise $2,500

2.

Debit Accounts Receivable $7,000

Credit Revenue $7,000

Noted: When received the payment from customer, Owens Jewelers records 2% discount if its customer pays within 15 days by the entry:

Debit Cash $6860

Debit Sales Discount $140

Credit Accounts Receivable $7,000