Fraxon Inc

question 46

Multiple Choice

Fraxon Inc.made a $10,000 sale on account with terms: of 1/15,n/30.If the company uses the gross method,which of the following will be included in the journal entry to record customer payment within the discount period?

• A)credit Accounts Receivable $10,000
• B)credit Sales Discount $100
• C)credit Sales Revenue $10,000
• D)credit Cash $9,900

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Definitions:

Cash Basis

An accounting method where revenues and expenses are recognized when cash is received or paid, not when incurred.

Operations

The day-to-day activities required for the running of a business or an organization, focusing on the production and delivery of goods and services.

Noncash Investing

Transactions that involve the acquisition or disposal of non-monetary assets through means other than direct cash payment.

Financing Activity

Operations related to the company's financing, including issuing shares, bonds, and managing equity, aimed at raising, refunding, or repaying the company's capital.