The entry to record the receipt of payment within the discount period on a sale of $2,500 with terms of 2/10, n/30 will include a credit to?

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06-09-2022
Business

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The entry to record the receipt of payment within the discount period on a sale of $2,500 with terms of 2/10, n/30 will include a credit to?

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tutorconsortium344 tutorconsortium344 · Answer 1 · 2022-09-08T13:06:49-04:00

The entry to record the receipt of payment is $2,590 in accounts receivable.

What is Trade discount?

Trade discounts, also known as functional discounts, are payments made to distribution channel participants in exchange for completing a task. Storage and shelf stocking are two examples of these tasks. Trade discounts are sometimes bundled to cover a variety of services. For instance, 20/12/5 may stand for 20% off for storing the merchandise, 12% more off for shipping, and 5% more off for keeping the shelves filled.

Terms 2/10, n/30 state that payments must be made within 10 days of the date of purchase to receive a 2% discount, and payments must be made in full within 30 days to avoid a discount.

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