We are recording a sales credit when the entry a debit to Cash and credit to Accounts Receivable at a discounted price.
What does sales discounts entails?
Normally, the debit of sales discounts account by the amount of the discount are recorded.
For instance, when we debit cash by $99 and debit sales discounts by $1, we will credit the accounts receivable account in the same journal entry.
In conclusion, we are recording a sales credit when the entry a debit to Cash and credit to Accounts Receivable at a discounted price.
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