This discount encourages the buyers to purchase goods because of the markdowns from the list price

• Cash Discounts

• Trade Discounts

• Sales Discounts

Which of the following is not a reason for sales discounts to be offered to the debtors?

• Increase the amount paid paid by the debtors

• improve liquidity by turning the accounts receivable into cash

• encourage earlier settlement of debts by debtors

• reduce the level of bad debts

Conrad purchased merchandise with a list price of P60,000 from the Klean Company. Klean Company offers its customers credit terms 2/10, n/30. What amount should Conrad pay if the cash discount is taken?

• 59,400

• 60,600

• 58.800

• 61,200

Carl purchases P50,000 merchandise from the Santes Co. with terms 3/10, n/30. How much discount is Carl entitled to take if paid within the discount period?

• P500

• P1,000

• P1,500

• P3,000

The periodic inventory system provides an up-to-date amount of inventory on hand.

• True

• False

A physical inventory is usually taken at the end of the accounting period.

• True

• False

A validated deposit slip indicates that cash and checks were actually deposited.

• True

• False

Cash discounts are called purchase discounts from the buyer's viewpoint.

• True

• False

Taking a physical inventory refers to making a count of all merchandise on hand at a particular time.

• True

• False

Gabriela used the perpetual inventory system. Gabriela purchased merchandise with an invoice amount of P800,000, terms 2/10 n/30. If Gabriela returned merchandise worth P20,000 to the supplier, what should be the journal entry to record the return include?

• Debit to Inventory P20,000

• Debit to Purchase Returns & Allow. of P20,000

• Credit to Inventory of P20,000

• Credit to Purchase Returns & Allow. of P20,000