Copyright

Our company uses a perpetual inventory system. On July 3, we sold merchandise with a cost of...

Question:

Our company uses a perpetual inventory system. On July 3, we sold merchandise with a cost of $3,000 for $6,500 to a customer on account. The terms of the sale were 2/10, n/30.

What account and amount would we credit to record the sales revenue for this transaction?

Credit-Term:

When a seller sells goods under a credit term then, they have an option to record sales either under the gross-sales price method or net-sales price method. The amount is the only difference between these two methods.

Answer and Explanation:

To record July 3, merchandise sale with a cost of $3,000 for $6,500 to a customer on account the revenue could be recorded at $6,500 or $6,370.

Explanation: The sales revenue would be recorded as $6,500 under the gross-price method. The sales revenue would be recorded for $6,370 ($6,500 - $6,500 x 2%) under the net-price method.

Note: The net sales price method records the sales revenue at the price net of allowed discount.


Learn more about this topic:

Loading...
What is Gross Price? - Definition & Formula

from Financial Accounting: Homework Help Resource

Chapter 6 / Lesson 22
19K

Related to this Question

Explore our homework questions and answers library