The credit card company charges a 2 fee what entry

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Unformatted text preview: ing a credit card. The credit card company charges a 2% fee. What entry will the company need to make? Accounts Receivable $980 Credit Card Discount $ 20 Sales Revenue $1,000 • Sales Discounts: Discount offered by a business when sell something on credit; is an incentive to encourage early payment. Normal stated in terms similar to p. 286. (Example: 2/10, n/30). Buyer only receives discount if paid within the discount period. If not, then full price is due. o Example: The Company sells merchandise to a customer on credit, with terms 2/10, n/30, for a price of $100. 38 tur,,er PUn wIun u1t lu utly uruu Cash $98 Sales Discounts $2 Accounts Receivable $100 If the customer does not pay within the discount period: Cash $100 Accounts Receivable $100 • Sales returns and allowances: Returns are merchandise that has been returned from a buyer because the merchandise was not satisfactory; Allowances are discounts granted to a buyer for damaged or unsatisfactory goods. o Example: A customer bought $50 of merchandise on credit, and decides to return the items to the C...
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This note was uploaded on 01/22/2014 for the course ACG 2021 taught by Professor Linkovich during the Spring '08 term at University of South Florida - Tampa.

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