SPEED TEST

Carl purchased P50,000 merchandise from the Sartre with terms of 3/10, n/30. How much discount is Carl entitled to take if it paid within the allowed discount period of 10 days?

• 500

• 1,000

• 1,500

• 3,000

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

• P59,400

• b. P60,600

• c. P61,200

• d. P58,800

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

• increase the amount paid by the debtors

• improve the liquidity by turning the accounts receivable into cash

• encourage earlier settlement of debts by debtors

• reduce the level of bad debts

A trade discount is:

• shown in the sales journal.

• shown in the purchase journal.

• shown in the general journal.

• not shown anywhere.

A sale on March 21 with terms of n/10 eom is due to be collected by

• March 31

• April 1

• April 10

• April 30

The entry to record the return of goods from a customer would include a

• credit to Sales.

• credit to Sales Returns and Allowances.

• debit to Sales.

• debit to Šales Returns and Allowances.

Merchandise inventory becomes part-of cost of goods sold when an entity

• pays for the inventory.

• purchases the inventory.

• receives payment from the customer.

• sells the inventory.

The entry to record a cash sale of P7,500 with terms of 2/10, n/30 would include a

• credit to Accounts Receivable for P7,500.

• credit to Sales for P7,500.

• debit to Sales Discounts for P150.

• debit to Sales for P7,350.

The collection of a P4,000 account within the 2% discount period would result in a

• credit to Accounts Receivable for P3,920.

• credit to Cash for P3,920.

• debit to Accounts Receivable for P3,920.

• debit to Sales Discounts for P80.

The collection of a P5,000 account beyond the 2% discount period would result in a

• credit to Accounts Receivable for P5,000.

• credit to Cash for P5,000.

• debit to Cash for P4,900.

• debit to Sales Discounts for P100.