Revision-Chapter 8
Authored by Hidayah Roslen
Business
University
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35 questions
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1.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
The two major sources of short-term financing are ________
a line of credit and notes payable
accounts payable and accruals
a line of credit and term loans
accounts receivable and notes payable
2.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
Accruals and accounts payable are ________.
negotiated and secured sources of long-term financing
negotiated and unsecured sources of short-term financing
secured sources of short-term financing
spontaneous and unsecured sources of short-term financing
3.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
1/15 net 30 date of invoice translates as ________.
a 1 percent cash discount may be taken if paid in 15 days; if no cash discount is taken, the
balance is due in 30 days after the middle of the month
a 1 percent cash discount may be taken if paid in 15 days; if no cash discount is taken, the
balance is due 30 days after the invoice date
a 1 percent cash discount may be taken if paid in 15 days; if no cash discount is taken, the
balance is due 30 days after the end of the month
a 1 percent discount may be taken on 15 percent of the purchase if the account is paid within
30 days after the end of the month
4.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
3/10 net 45 end of month (EOM) translates as ________
a 10 percent cash discount may be taken if paid in three days; if no cash discount is taken, the
balance is due in 45 days
a 3 percent cash discount may be taken if paid in 10 days; if no cash discount is taken, the
balance is due 45 days after transaction is complete
a 3 percent cash discount may be taken if paid in 10 days; if no cash discount is taken, the
balance is due 45 days after the end of the month
a 3 percent discount may be taken on 10 percent of the purchase if the account is paid within
45 days after the end of the month
5.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
If a firm decides to take the cash discount that is offered on goods purchased on credit, the firm should ________.
pay as soon as possible
pay on the last day of the credit period
pay on the last day of the credit period
pay on or before the last day of the discount period
6.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
The cost of giving up a cash discount on a credit purchase is ________.
added on to the price of the goods in order to make payment quickly
deducted from the price of the goods in order to make payment quickly
the implied interest rate paid in order to delay payment for an additional number of days
deducted from the price of the goods in order to make payment quickly
7.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
A firm purchased goods with a purchase price of $1,000 and credit terms of 1/10 net 30. The firm paid for these goods on the 5th day after the date of sale. The firm must pay ________ for the goods.
$990
$900
$1,000
$1,100
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