Income statements AND discount exp/rev

Discount revenue is classified as a revenue account as it

• Increases Assets and Increases OE

• Increases Assets and Decreases Liabilities

• Decreases Liabilities and Increases OE

• Increases Assets and Decreases OE

Discount expense is an expense account as it results in a

• Decrease to assets (bank) and a decrease to Owner's equity

• Increase to Liabilities and a decrease to Owner's equity

• Decrease to assets (Accounts receivable) and a decrease to Owner's equity

• Decrease to assets (Accounts receivable) and a increase to Owner's equity

Businesses should offer a discount to customers in order to

• Boost Net profit

• Encourage prompt payment of accounts

• Be nice

• Increase sales

A reduction in the outflow payable to Accounts payable is

• Discount revenue

• Discount expense

Credit terms of 3/6:n14 mean

• No discount is offered

• 6% discount if paid within 3 days of invoice date

• 3% discount if paid within 6 days of invoice date

• 36% discount if paid within 14 days of invoice

A disadvantage of offering a discount to Accounts receivable is

• Less cash will be received by Accounts receivable

• More cash will be received from Accounts receivable AND Net profit will be higher

• Net profit will be lower

• Less cash will be received by Accounts receivable AND Net profit will be lower

A reduction in the inflow from Accounts receivable is

• Discount revenue

• Discount expense

Sales were $108000 and cost of sales of $42000, means Gross Profit is

• $56,000

• $150,000

• $66,000

• $76,000

After 'Add other revenue' the next heading in an Income statement is ....

• Gross Profit

• Less other expenses

• Less cost of goods sold

• Net profit or Net loss

The difference between Sales and Gross Profit in an Income statement is

• Cost of sales

• Cost of goods sold

• Revenue

• Net Profit