AG Inc. made a $25,000 sale on account with the following terms: 2/10, n/30. If the company uses the net method to record sales made on credit, what is/are the debit(s) in the journal entry to record the sale? b. Debit Accounts Receivable for $24,500. Debit Accounts Receivable for $24,500 and Sales Discounts for $500. Debit Accounts Receivable for $25,000. Debit Accounts Receivable for $25,000 and Sales Discounts for $500. d. On April 2, Kelvin sold $40,000 of inventory items on credit with the terms 1/10, net 30. Payment on $24,000 sales was received on April 8 and the remaining payment on $16,000 sales was received on April 27. Assuming Kelvin uses the net method of accounting for sales discounts, the entry recorded on April 27 would include a: a. debit to Cash and credit to Accounts Receivable for $15,840. debit to Accounts Receivable and credit to Sales Revenue for $40,000. debit to Accounts Receivable and credit to Sales Discounts Forfeited for $160. debit to Cash and credit to Sales Discounts Forfeited for $400. A cash equivalent is a short-term, highly liquid investment that is readily convertible into known amounts of cash and c a. is acceptable as a means to pay current liabilities b. has a current market value that is greater than its original cost bears an interest rate that is at least equal to the prime rate of interest at the date of liquidation. d. is so near its maturity that it presents insignificant risk of changes in interest rates When a customer purchases merchandise inventory from a business organization, she may be given a discount which is designed to induce prompt payment. Such a discount is called a(n) a. trade discount. b. nominal discount. c. enhancement discount. d. cash discount. Why are inventories included in the computation of net income? To determine cost of goods sold. b. To determine sales revenue. C. To determine merchandise returns Inventories are not included in the computation of net income