Asked by diksha pathria on May 17, 2024
Verified
Surplus Galore uses the gross method of accounting for sales discounts. Selected data from its records for the year ended December 31 was as follows: Assume that Austin Maxwell pays his $400 receivable on January 3, taking the 2 percent discount to which he is entitled. Journalize the entry to record the transaction.
Gross Method
An accounting method for recording purchases at the full invoice price without deducting any cash discounts offered.
Sales Discounts
Reductions in the sale price given by a seller to a buyer, often used as an incentive for early payment or bulk purchasing.
Receivable
Amounts of money owed to a company by its customers or other parties for goods or services provided.
- Note down transactions pertinent to purchases and sales, adopting the gross method in calculating sales discounts.
Verified Answer
JI
Learning Objectives
- Note down transactions pertinent to purchases and sales, adopting the gross method in calculating sales discounts.