Question

If merchandise is sold on account to a customer for $10,000, terms FOB shipping point, 1/10, n/30, what is the amount to be recorded as an accounts receivable?

A) $10,000
B) $10,050
C) $9,950
D) None of the above

Answer 1

The amount to be recorded as an accounts receivable is $10,000.

Step-by-step explanation:

The amount to be recorded as an accounts receivable when merchandise is sold on account to a customer for $10,000 with terms FOB shipping point, 1/10, n/30 is $10,000.

FOB shipping point means that responsibility transfers to the buyer once the goods leave the seller's premises. The terms 1/10, n/30 mean that if the buyer pays within 10 days, they can take a 1% discount, otherwise the full amount is due within 30 days.

Since this is an accounts receivable, it represents the amount owed by the customer and should be recorded at the full amount of $10,000.

This is because the discount offered is a potential deduction that the customer may take advantage of if they pay early, but it does not affect the initial amount recorded as receivable by the company at the time of the sale.