Credit terms are the terms of payment offered by the seller to the buyer. 2/10, n/30 refers to the sales discount given to the buyer by the seller in case of prompt payment. 2/10, n/30 means the following: “2” is the discount percentage offered to the purchaser by the seller. “10” refers to the number of days available for the buyer to pay and take advantage of the discount. “n/30” indicates that if the payment is not made by the buyer within 30 days, then he might not be eligible for the sales discount. Hence, payment will be due for the net amount at the end of the current month . To Discuss: Whether Mr. S behaved in a professional manner by subtracting the discount even though the discount period had expired.

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General Accounting

Answer 1

Question

Chapter 5, Problem 5.1CP

To determine

Credit terms are the terms of payment offered by the seller to the buyer.

2/10, n/30 refers to the sales discount given to the buyer by the seller in case of prompt payment. 2/10, n/30 means the following:

“2” is the discount percentage offered to the purchaser by the seller.

“10” refers to the number of days available for the buyer to pay and take advantage of the discount.

“n/30” indicates that if the payment is not made by the buyer within 30 days, then he might not be eligible for the sales discount. Hence, payment will be due for the net amount at the end of the current month.

To Discuss: Whether Mr. S behaved in a professional manner by subtracting the discount even though the discount period had expired.

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Answer 2

Question

Chapter 5, Problem 5.1CP

To determine

Credit terms are the terms of payment offered by the seller to the buyer.

2/10, n/30 refers to the sales discount given to the buyer by the seller in case of prompt payment. 2/10, n/30 means the following:

“2” is the discount percentage offered to the purchaser by the seller.

“10” refers to the number of days available for the buyer to pay and take advantage of the discount.

“n/30” indicates that if the payment is not made by the buyer within 30 days, then he might not be eligible for the sales discount. Hence, payment will be due for the net amount at the end of the current month.

To Discuss: Whether Mr. S behaved in a professional manner by subtracting the discount even though the discount period had expired.

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Answer 3

Question

Chapter 5, Problem 5.1CP

To determine

Credit terms are the terms of payment offered by the seller to the buyer.

2/10, n/30 refers to the sales discount given to the buyer by the seller in case of prompt payment. 2/10, n/30 means the following:

“2” is the discount percentage offered to the purchaser by the seller.

“10” refers to the number of days available for the buyer to pay and take advantage of the discount.

“n/30” indicates that if the payment is not made by the buyer within 30 days, then he might not be eligible for the sales discount. Hence, payment will be due for the net amount at the end of the current month.

To Discuss: Whether Mr. S behaved in a professional manner by subtracting the discount even though the discount period had expired.

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Answer 4

Question

Chapter 5, Problem 5.1CP

To determine

Credit terms are the terms of payment offered by the seller to the buyer.

2/10, n/30 refers to the sales discount given to the buyer by the seller in case of prompt payment. 2/10, n/30 means the following:

“2” is the discount percentage offered to the purchaser by the seller.

“10” refers to the number of days available for the buyer to pay and take advantage of the discount.

“n/30” indicates that if the payment is not made by the buyer within 30 days, then he might not be eligible for the sales discount. Hence, payment will be due for the net amount at the end of the current month.

To Discuss: Whether Mr. S behaved in a professional manner by subtracting the discount even though the discount period had expired.

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Answer 5

Chapter 5, Problem 5.1CP

To determine

Credit terms are the terms of payment offered by the seller to the buyer.

2/10, n/30 refers to the sales discount given to the buyer by the seller in case of prompt payment. 2/10, n/30 means the following:

“2” is the discount percentage offered to the purchaser by the seller.

“10” refers to the number of days available for the buyer to pay and take advantage of the discount.

“n/30” indicates that if the payment is not made by the buyer within 30 days, then he might not be eligible for the sales discount. Hence, payment will be due for the net amount at the end of the current month.

To Discuss: Whether Mr. S behaved in a professional manner by subtracting the discount even though the discount period had expired.

Answer 6

Chapter 5, Problem 5.1CP

To determine

Credit terms are the terms of payment offered by the seller to the buyer.

2/10, n/30 refers to the sales discount given to the buyer by the seller in case of prompt payment. 2/10, n/30 means the following:

“2” is the discount percentage offered to the purchaser by the seller.

“10” refers to the number of days available for the buyer to pay and take advantage of the discount.

“n/30” indicates that if the payment is not made by the buyer within 30 days, then he might not be eligible for the sales discount. Hence, payment will be due for the net amount at the end of the current month.

To Discuss: Whether Mr. S behaved in a professional manner by subtracting the discount even though the discount period had expired.

Answer 7

Chapter 5, Problem 5.1CP

To determine

Credit terms are the terms of payment offered by the seller to the buyer.

2/10, n/30 refers to the sales discount given to the buyer by the seller in case of prompt payment. 2/10, n/30 means the following:

“2” is the discount percentage offered to the purchaser by the seller.

“10” refers to the number of days available for the buyer to pay and take advantage of the discount.

“n/30” indicates that if the payment is not made by the buyer within 30 days, then he might not be eligible for the sales discount. Hence, payment will be due for the net amount at the end of the current month.

To Discuss: Whether Mr. S behaved in a professional manner by subtracting the discount even though the discount period had expired.

Answer 8

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Answer 19

Ch. 5 - Prob. 1DQ Ch. 5 - Prob. 2DQ Ch. 5 - The credit period during which the buyer of...Ch. 5 - What is the meaning of (A) 1/15, n/60; (B) n/30;...Ch. 5 - How are sales to customers using .MasterCard and...Ch. 5 - Prob. 6DQ Ch. 5 - Prob. 7DQ Ch. 5 - Name three accounts that would normally appear in...Ch. 5 - Audio Outfitter Inc., which uses a perpetual...Ch. 5 - Prob. 10DQ

Solution Summary: The author explains that if Mr. S purposefully subtracted the discount even after the discounted period had expired, it would be considered unprofessional conduct.

Chapter 5 Solutions