Credit Sales and Collection
A company provides consulting services for $1,250 on account
*Record the Journal Entry
Accounts Receivable 1,250
Service Revenue 1,250
A product normally sells for $900, but march promotion reduces the price to $720. Sold on account
*What is the Journal Entry
Accounts Receivable 720
Sales Revenue 720
A customer returns goods originally purchased for $300 on account.
Sales Returns 300
Accounts Receivable 300
(“Seller reduces balance of accounts receivable if original sale was on account.”)
A customer pays a $1,000 balance within a 2/10, n/30 discount period.
Cash 980
Sales Discounts 20
Accounts Receivable 1,000
(“Customer will receive a 2% discount if paid within 10 days.”)
A company estimates $4,000 of receivables will be uncollectible.
Bad Debt Expense 4,000
Allowance for Uncollectible Accounts 4,000
A customer pays $1,250 previously owed on account
*What is the Journal Entry
Cash 1,250
Accounts Receivable 1,250
A $5,000 service is discounted to $4,250 for a student group
Accounts Receivable 4,250
Service Revenue 4,250
A customer keeps defective goods but receives a $120 reduction in the amount owed.
Sales Allowances 120
Accounts Receivable 120
A $2,500 account is paid within the discount period (2/10).
Cash 2,450
Sales Discounts 50
Accounts Receivable 2,500
A company estimates 20% of its $30,000 receivables will be uncollectible.
Bad Debt Expense 6,000
Allowance for Uncollectible Accounts 6,000
A company sells merchandise for $3,600 on account. The customer promises to pay next month
Accounts Receivable 3,600
Sales Revenue 3,600
A $2,200 product is sold for $1,870 after a trade discount.
Accounts Receivable 1,870
Sales Revenue 1,870
A $900 sale on account is fully returned.
Sales Returns 900
Accounts Receivable 900
A $4,000 account is paid after the discount period.
Cash 4,000
Accounts Receivable 4,000
A customer’s $1,800 account is written off.
Allowance for Uncollectible Accounts 1,800
Accounts Receivable 1,800
A customer pays only $2,000 of their 2,500 account balance. The remaining 500 is still owed.
*What is the Journal Entry
Cash 2,000
Accounts Receivable 2,000
A $10,000 laser procedure is discounted to $8,000 for a March promotion.
Accounts Receivable 8,000
Service Revenue 8,000
A customer receives a $350 allowance for a flawed service outcome.
Sales Allowances 350
Accounts Receivable 350
A $3,200 account is paid within a 1/10 discount period.
Cash 3,168
Sales Discounts 32
Accounts Receivable 3,200
A company estimates uncollectibles of $9,500 at year‑end.
Bad Debt Expense 9,500
Allowance for Uncollectible Accounts 9,500
A company provides services for $4,800 on account. The customer pays half immediately and will pay the rest later
*What is the Journal Entry
Cash 2,400
Accounts Receivable 2,400
Service Revenue 4,800
A $7,500 service is discounted to $6,375 for a corporate client.
Accounts Receivable 6,375
Service Revenue 6,375
A customer returns half of a $1,600 purchase.
Sales Returns 800
Accounts Receivable 800
A $6,000 account is paid within a 3/10 discount period.
Cash 5,820
Sales Discounts 180
Accounts Receivable 6,000
A company writes off $3,200 of receivables during the year.
Allowance for Uncollectible Accounts 3,200
Accounts Receivable 3,200