On February 23, a company provides services on account to a customer for $5,600.
ID: 2507841 • Letter: O
Question
On February 23, a company provides services on account to a customer for $5,600. The customer pays in full for those services on March 4.
On August 12, a company provides services on account to a customer for $3,800. However, on August 16, the customer is not completely satisfied with the service and the company grants an allowance on the amount owed of $480. On August 20, the customer makes full payment of the balance owed, excluding the allowance.
Record the services provided on August 12, the sales allowance on August 16, and the cash collection on August 20.
Thanks!
On February 23, a company provides services on account to a customer for $5,600. The customer pays in full for those services on March 4.
Record the transactions for the company when the services are provided on February 23 and when the cash is collected on March 4.+
On August 12, a company provides services on account to a customer for $3,800. However, on August 16, the customer is not completely satisfied with the service and the company grants an allowance on the amount owed of $480. On August 20, the customer makes full payment of the balance owed, excluding the allowance.
Record the services provided on August 12, the sales allowance on August 16, and the cash collection on August 20.
Thanks!
Explanation / Answer
February 23
DEBIT ACCOUNTS RECIEVABLE = 5600
CREDIT SERVICE REVENUE = 5600
March 4.
DEBIT CASH = 5600
CREDIT ACCOUNTS RECIEVABLE = 5600
August 12
DEBIT ACCOUNTS RECIEVABLE = 3800
CREDIT SERVICE REVENUE = 3800
August 16
DEBIT SALES ALLOWANCE [DISCOUNT] = 480
CREDIT ACCOUNTS RECIEVABLE = 480
August 20.
DEBIT CASH [3800-480] = 3320
CREDIT ACCOUNTS RECIEVABLE = 3320
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