The credit terms 4/10, n/30 are interpreted as: O 4% cash discount if the amount is paid within 10 days, or the balance due in 30 days O 10% cash discount if the amount is paid within 4 days, or the balance due in 30 days. O 30% discount if paid within 4 days. O 40% discount if paid within 10 days. 25 pts Sales returns: Refer to merchandise that customers return to the selle for a refund. Refer to coupons applied in the selling price of merchandise sold to customers. Represent cash discounts. Represent trade discounts. The credit terms 4 n 10'30 are interpreted as: 4% cash discount if the amount is paid within 10 days, or the balance due in 30 days. 10% cash discount if the amount is paid within 4 days, or the balance due in 30 days. 30% discount if paid within 4 days. 40% discount if paid within 10 days.

The credit terms 4/10, n/30 are interpreted as: O 4% cash discount if the amount is paid within 10 days, or the balance due in 30 days O 10% cash discount if the amount is paid within 4 days, or the balance due in 30 days. O 30% discount if paid within 4 days. O 40% discount if paid within 10 days. 25 pts Sales returns: Refer to merchandise that customers return to the selle for a refund. Refer to coupons applied in the selling price of merchandise sold to customers. Represent cash discounts. Represent trade discounts. The credit terms 4 n 10'30 are interpreted as: 4% cash discount if the amount is paid within 10 days, or the balance due in 30 days. 10% cash discount if the amount is paid within 4 days, or the balance due in 30 days. 30% discount if paid within 4 days. 40% discount if paid within 10 days.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter10: Accounting For Sales And Cash Receipts

Section: Chapter Questions

Problem 2MC: When 25 of merchandise is returned for a credit on account, what is the amount of the credit to...

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When 25 of merchandise is returned for a credit on account, what is the amount of the credit to Accounts Receivable, assuming a 6% sales tax rate? (a) 1.50 (b) 25.00 (c) 26.50 (d) 31.00
A customer pays on credit for $1,250 worth of merchandise, terms 4/15, n/30. If the customer pays within the discount window, how much will they remit in cash to the retailer? A. $1,250 B. $1,200 C. $50 D. $500
Prepare journal entries for the following sales and cash receipts transactions. (a) Merchandise is sold on account for 300 plus 3% sales tax, with 2/10, n/30 cash discount terms. (b) Part of the merchandise sold in transaction (a) for 70 plus sales tax is returned for credit. (c) The balance on account for the merchandise sold in transaction (a) is paid in cash within the discount period.
Which of the following numbers represents the discount percentage applied if a customer pays within a discount window and credit terms are 3/15, n/60? A. 3 B. 15 C. 60 D. 3 and 15
9. The entry to record the receipt of payment within the discount period on a sale of P10,000 with terms of 3/15, n/60 will include a a. debit to Sales Discounts for $300 b. debit to Cash for P9,700. Credit to Sales Revenue for P9700 c. credit to Accounts Receivable for P9,700. d. credit to Sales Revenue for P10,000.
Merchandise invoiced at $8,900 is sold on terms 1/10, n/30. If the buyer pays within the discount period, what amount will be reported on the income statement as net sales?
Sales-Related Transactions After the amount due on a sale of $172,675, terms 2/10, n/30, is received from a customer within the discount period, the seller consents to the return of the entire shipment. The cost of the merchandise returned was $103,605. If required, round your answers to nearest whole value. a. What is the amount of the refund owed to the customer? b. Illustrate the effects on the accounts and financial statements of the return and the refund. If no account or activity is affected, select "No effect" from the dropdown and leave the correspondir number entry box blank. Enter account decreases, net cash outflows, and all negative effects on net income as negative amounts. Balance Sheet Stockholders' Assets Liabilities Equity Cash v + Inventory v Est. Returns Inventory = Customer Refunds Payable v + No effect v Statement of Cash Flows Income Statement Operating v No effect v
Merchandise costing $2,000 is sold for $3,000 on terms 2/30, n/60. If the customer pays within the discount period, what amount will be reported on the income statement as net sales and as gross profit? Net Sales Gross Profit
1. Taking advantage of a 2/10, n/30 purchases discount is equal to a yearly savings rate of approximately a.20% b.2% c.24% d.36% 2. A sales invoice included the following information: merchandise price, $12,000; terms 1/10, n/eom, FOB shipping point with prepaid freight of $900 added to the invoice. Assuming that a credit for merchandise returned of $500 (before discount) is granted prior to payment and the invoice is paid within the discount period, what amount of cash should be received by the seller? a.$11,500 b.$12,285 c.$11,385 d.$10,480 3. Cumberland Co. sells $1,012 of merchandise to Hancock Co. for cash. Cumberland paid $730 for the merchandise. Under a perpetual inventory system, which of the following is the correct journal entry(ies)? a.debit Cash, $1,012; credit Merchandise Inventory, $730 b.debit Cash, $1,012; credit Sales, $1,012; and debit Cost of Merchandise Sold, $730; credit Merchandise Inventory, $730 c.debit Accounts Receivable, $1,012; credit Sales, $1,012; and…
Sales-Related Transactions After the amount due on a sale of $145,225, terms 2/10, n/30, is received from a customer within the discount period, the seller consents to the return of the entire shipment. The cost of the merchandise returned was $79,874. If required, round your answers to nearest whole value. a. What is the amount of the refund owed to the customer?$fill in the blank 1 b. Illustrate the effects on the accounts and financial statements of the return and the refund. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases, net cash outflows, and all negative effects on net income as negative amounts.
Question 5 a. Cash discounts will normally appear on an invoice in terms such as 2/10 n30. What does this mean for an invoice of value GH¢10,000? b. Extracts from the profit and loss account for the year and the balance sheet as at the end of the year for NORA Enterprise are shown below. Assume all sales and purchases are on credit terms. Item Sales Amount GH¢ 200,000 Cost of goods sold 150,000 Purchases 120,000 Accounts Receivable 35,500 Accounts Payable 18,000 Inventory Finished goods 15,000 Work in progress 28,000 37,000 Raw materials i. Calculate the overall inventory turnover period and ratio. ii. Calculate the accounts receivable turnover period and ratio. iii. Compute the accounts payable turn over period and ratio. iv. What do the values computed in (a), (b) and (c) mean? v. What is the length of the operating cycle and the cash conversion cycle?
TRUE OR FALSE 1. Cost of goods sold is an operating expense. 2. Gross profit is equal to net sales plus cost of goods sold. 3. Net sales is equal to sales revenue plus sales returns and minus sales discounts. 4. Credit terms of 3/15, n/30 means the purchaser can deduct 3% of the invoice price if paid within 15 days. 5. FOB shipping point means title to the goods passes to the purchaser upon receipt of the goods and the seller is responsible for the cost of the freight. 6. In the closing entry process, the sales returns and allowances account is debited. 28. If the ownership of merchandise passes to the buyer when the se. delivers the merchandise for shipment, the terms are stated as FOB destination. 29. The abbreviation FOB stands for Free On Board. 30. If the buyer bears the transportation costs related to a purchase, the terms are said to be FOB destination. 31. The seller may prepay the transportation costs even though the terms are FOB shipping point. 32. Title to merchandise…