On February 3 Smart Company sold merchandise in the amount o

On February 3, Smart Company sold merchandise in the amount of $A100 to Truman Company, with credit terms of 2/10, n/30. The cost of the items sold is $2.830. Smart uses the perpetual inventory system and the gross method. Truman pays the invoice on February & and takes the appropriate discount. The journal entry that Smart makes on February 8 is Multiple Choice VBNM

Solution

Answer is Cash account Dr. 4018 Sales discount Dr. 82      Accounts receivable 4100 Explanation: Sales discount = 4100*2% =82 paid with in 10 days hence allowed discount.