Quiz - Purchases and Sales (U4)

A quantity discount is:

• a reduction in price for purchasing in large quantities

• an increase in price for purchasing in small quantities

• a special offer for buying a single item

• a penalty for returning items

A credit invoice is:

• a document issued by a seller to a buyer, reducing the amount owed by the buyer

• a document issued by a buyer to a seller, increasing the amount owed by the buyer

• a document issued by a bank to a customer, detailing the customer's credit score

• a document issued by a government to a citizen, detailing tax obligations

Which of the following is a type of entry that a seller may prepare in addition to the basic entry?

• Freight Costs

• Sales revenue

• Depreciation

• Sales Discounts

Which of the following is a type of entry that a purchaser may prepare in addition to the basic entry?

• Purchase discounts

• Freight Costs

• Salaries payable

• Utilities expense

Fill in the blank: Debit _______ to accumulate transportation costs on incoming goods.

• Delivery Expense

• Inventory Costs

• Merchandise Inventory

• Shipping Fees

A buyer may keep the merchandise if the seller grants a deduction from the purchase price. This is known as a ________.

• Purchase Allowance

• Discount Offer

• Price Reduction

• Rebate

What happens if a purchase is made for cash according to the Purchase Returns and Allowances?

• The buyer will receive a cash refund.

• The seller will issue a credit invoice.

• The buyer's account payable increases.

What does '2/10 Net 30' mean in credit terms?

• 2% discount if paid within 10 days, otherwise due in 30 days

• 10% discount if paid within 2 days, otherwise due in 30 days

• 2% discount if paid within 30 days, otherwise due in 10 days

• 10% discount if paid within 30 days, otherwise due in 2 days

Fill in the blank: Debit _______ to accumulate transportation costs on outgoing goods.

• Delivery Expense

• Inventory Costs

• Merchandise Inventory

• Shipping Fees

Fill in the blank: The total amount before any discounts is _______.

• $465.45

• $500.00

• $450.00

• $480.00