Merchandise is sold for $3,600, terms FOB destination, 2/10, n/30, with prepaid freight costs of $150. The sales amount recorded is $3,528.

FOB Destination

A term in shipping indicating that the seller retains ownership and responsibility for the goods until they are delivered to the buyer's location.

Prepaid Freight Costs

Expenses paid in advance for the transportation of goods, often included in the inventory cost.

Sales Amount

The total revenue generated from the sale of goods or services over a specific period.

Understand the fundamentals of documenting sales transactions and their effect on accounts receivable and the acknowledgment of revenue.
Acquire knowledge on how to determine purchase and sales discounts and analyze their implications on financial documentation.

Verified Answer

Final Answer :

True

Explanation :

Amount of sales recorded = Sales - Sales discount = $3,600 - (2% × $3,600) = $3,600 - $72 = $3,528?

Learning Objectives

Understand the fundamentals of documenting sales transactions and their effect on accounts receivable and the acknowledgment of revenue.
Acquire knowledge on how to determine purchase and sales discounts and analyze their implications on financial documentation.