Homework Answers
Answer
- Discount term is that if paid within 10 days, 2.5% discount will be given to customer.
- Customer pays on Jul 8 (within 10 days of Jul 1). Hence discount will be given to the customer.
- Amount of discount = $ 800 x 2.5% = $ 20
- This discount is a SALES DISCOUNT.
- Sales Discount is treated as an EXPENSE. Expenses are to be DEBITED.
- Correct Answer = Option ‘A’
Dr Discount Expense for $ 20
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