24) Charlton Sales has a receivable for $92 that they now deem to be uncollectible. Charlton uses the direct write-off method. Please provide the journal entry for the write-off.
Learning Objective 8-4
1) A credit card processing company generally uses one of two methods of payment—the net and the gross method.
2) When a business accepts credit cards from customers in payment of sales, the business has to pay a fee to the credit card processor.
3) Which of the following is NOT one of the benefits of a business accepting credit cards from their customers?
A) The business doesn't take the risk of the customer failing to pay.
B) The business can attract more customers and more sales.
C) The business earns a higher profit on credit card sales than cash sales.
D) The business does not have to check the credit ratings of customers.
4) Anchor Sales accepts credit cards from its customers. Assume Anchor makes a sale of $100 and the processor charges a 3% fee. Assume also that the credit card processing company uses the net method of depositing funds. Please provide the journal entry made by Anchor to record the sales revenue.
5) Anchor Sales accepts credit cards from its customers. Assume Anchor makes a sale of $100 and the processor charges a 3% fee. Assume also that the credit card processing company uses the gross method of depositing funds. This method employs a sequence of two separate journal entries to record the revenue transaction and settlement with the processor. Please provide the first journal entry made by Anchor to record the sales revenue.
6) Anchor Sales accepts credit cards from its customers. Assume Anchor makes a sale of $100 and the processor charges a 3% fee. Assume also that the credit card processing company uses the gross method of depositing funds. This method employs a sequence of two separate journal entries to record the revenue transaction and settlement with the processor. Please provide the second journal entry made by Anchor to record the completion of the settlement with the processor.