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 1

Question

Chapter 6, Problem 6.1CP

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 6, Problem 6.1CP

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.

Expert Solution & Answer

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Answer 3

Question

Chapter 6, Problem 6.1CP

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 6, Problem 6.1CP

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 6, Problem 6.1CP

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 6, Problem 6.1CP

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 6, Problem 6.1CP

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 9

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Answer 10

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Answer 11

Ch. 6 - What distinguishes a merchandising business from a...Ch. 6 - Can a business earn a gross profit but incur a net...Ch. 6 - The credit period during which the buyer of...Ch. 6 - Prob. 4DQ Ch. 6 - Prob. 5DQ Ch. 6 - Prob. 6DQ Ch. 6 - Who bears the freight when the terms of sale are...Ch. 6 - Name four accounts that would normally appear in...Ch. 6 - Audio Outfitter Inc., which uses a perpetual...Ch. 6 - Assume that Audio Outfitter Inc. in Discussion...

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.

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Chapter 6 Solutions