On January 2, Favre Co

Multiple Choice

On January 2, Favre Co. made a $2,000 credit sale under the terms 3/10, n/30. If Favre uses the gross method of accounting for cash discounts, the proper entry on January 2 includes

A) a debit to Accounts Receivable for $2,000, and a credit to Sales for $2,000.
B) a debit to Accounts Receivable for $2,000, a credit to Cash Discounts for $1,940, and a credit to Sales for $60.
C) a debit to Accounts Receivable for $1,940, and a credit to Sales for $1,940.
D) a debit to Accounts Receivable for $1,940, a debit to Cash Discounts for $60, and a credit to Sales for $2,000.