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The ACCT 201 Co. sold merchandise inventory on account to X Co. for $2,000; terms 1/10, net 30; free on board shipping point. The cost
The ACCT 201 Co. sold merchandise inventory on account to X Co. for $2,000; terms 1/10, net 30; free on board shipping point. The cost of the merchandise sold was $1,500. Payment for the merchandise by X Co. was AFTER the discount period. Which of the following entries correctly records the receipt of cash for ACCT 201? The company uses the NET method to record sales discounts.
- Dr. Accounts Payable $3,500; Cr. Cash $3,500
- Dr. Cash $2,000; Cr. Accounts Receivable $1,980; Sales $20
- Dr. Accounts Receivable $2,000; Cash $2,000
- Dr. Cash $1,980; Cr. Accounts Receivable $1.980; Cr. Sales Discounts $20
- None of the above entries are correct.
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