First entry above shows that ABC Co. sells its goods at 2,000 TL on credit. Hence, accounts receivables account is debited and sales revenue account is credited at the same amount of 2,000 TL. In the second entry, however, the accounting impact of customer returns, which is 200 TL worth, is reported. In this case, as it returns the goods, the customer will pay less in the future. For this reason, accounts receivable is credited by 200 TL to account for such a decrease. Sales returns and allowances account is debited to Cash discounts are intended to encourage the customer to make their payment earlier. Date June 1 Accounts Receivable Account Titles and Short Explanation Debit Credit 2,000 Sales Revenue 2,000 To record sales on account Date June 5 Sales Returns and Allowances Account Titles and Short Explanation Debit Credit 200 Accounts Receivable 200 To record goods returned Date June 11 Account Titles and Short Explanation Debit Credit Cash (1,800 TL - 36 TL) Sales Discounts (1,800 TL x 0.02) 1,764 36 Accounts Receivable 1,800 To record collection of accounts receivable in a discount period 225 Accounting I record for customer returns. Third entry presents the records pertaining to the collection of receivables before the maturity predetermined as 30 days. Since the customer makes an early payment, ABC Co. applies a discount of 2% on the remaining receivable balance of 1,800 TL. This 36 TL discount is debited as sales discount. Cash is also debited to stand for the collection of receivables after discount. Ultimately, accounts receivable is credited as a whole in order to close the open balance.