Answer:
B) Sales discount
Explanation:
For example, company A sells $100 in merchandise to company B on account under the following terms 2/10, n/30. The journal entry to record the initial transaction is:
Dr Accounts receivable 100
Cr Sales revenue 100
If the buyer pays within the discount period, the journal entry should be:
Dr Cash 98
Dr Sales discount 2
Cr Accounts receivable 100
Sales discount is a contra revenue account that lowers sales revenue.
