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Understanding the Business Transaction nsaction Customers can purchase items for cash or on account. A sale made on account is recorded as an accounts receivable.
Understanding the Business Transaction nsaction Customers can purchase items for cash or on account. A sale made "on account" is recorded as an accounts receivable. Conrad Sales sells office equipment to Horizon Enterprises on account for $1,400, terms 2/10, n/30. The cost of merchandise sold is $1,100 Feb. 5, 2014 (sale on account) Feb. 10, 2014 (sales return) Conrad Sales issues a credit memo in the amount of $550 for returned items. The cost of returned items is $350 Feb. 15, 2014 (sales discount) Conrad Sales receives the amount due from the Feb. 5 sale less the returned item on Feb. 10
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