The Entry to Record a Sale of $700 with Terms

question 92

Multiple Choice

The entry to record a sale of $700 with terms of 2/10, n/30 will include a

• A) credit to Sales Discounts for $14.
• B) debit to Cash for $686.
• C) credit to Accounts Receivable for $700.
• D) credit to Sales Revenue for $700.

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Definitions:

Fixed Expense

Costs that do not change with the level of production or business activity, such as rent or salaries.

Break-even

The juncture where the total expenses match the total income, leading to a situation where there is no profit or loss.

Selling Price

The amount of money charged for a product or service, determined by cost, market demand, and competition.

Advertising Budget

The amount of money a company plans to spend on promotional activities over a certain period to market its products or services.