On November 10 of the current year, Flores Mills sold carpet to a customer for $7,300 with credit terms 4/10, n/30. Flores uses the gross method of accounting for cash discounts. What is the correct entry for Flores on November 10?

Accounts receivable - $7300 Dr.

Sales - $7300 Cr.

Explanation:

Given the following :

Amount carpet was sold = $7,300

Credit terms = 4/10 n/30

Date of sale = November 10

According to the credit terms of the sale, the customers receives a discount of 4% of payment is made within 10 days otherwise customer makes full payment. In other to make record of the purchase using the gross method of accounting on the same day, record is taken without deduction of the discount attached to the sale until payment is made.

Account receivable is debited with the sales price as payment has not yet been made and sales is credited with the equivalent amount.

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