Asked by Sarah Gittins on Jun 18, 2024
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Woods Co.uses a perpetual inventory system,and accepts the World Express bank credit card from its customers.World Express charges a 3.5% service fee and all credit card receipts deposited are credited to the company account on the day of deposit.On February 28,Woods sold $24,000 worth of merchandise to customers (that had cost $14,400)using the World Express charge card.Prepare the journal entries to record February 28 sales.
Service Fee
A charge imposed for the provision of a service, often additional to the regular cost of goods or services sold.
Perpetual Inventory System
An accounting method that continuously tracks inventory levels by adjusting them with each sale or purchase transaction.
Journal Entries
The method by which financial transactions are recorded in the accounting records of a business, detailing the accounts affected and the amounts.
- Implement the process of journal entry documentation for sales activities, including transactions made on credit and with credit cards.
- Apprehend the consequences service charges have on transactions made with credit cards.
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Learning Objectives
- Implement the process of journal entry documentation for sales activities, including transactions made on credit and with credit cards.
- Apprehend the consequences service charges have on transactions made with credit cards.
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