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Question 1

  1. Sales with terms 2/ 10, n/ 30 means:
    The buyer gets a 10 percent discount for payment within 30 days.
    The buyer gets 2 percent discount for payment within 10 days.
    The buyer gets a 10 percent discount for payment within 10 days.
    The buyer gets a 2 percent discount for payment within 30 days.
2 points

Question 2

  1. A $ 1,000 sale is made on May 1 with terms 2/ 10, n/ 30. What amount, if received on May 9, will the customer’s check be?
    $1,000
    $ 900
    $ 980
    $ 800
2 points

Question 3

  1. A company has net sales of $500,000 and cost of goods sold of $400,000.  The company’s gross profit percentage is:
    80%
    20%
    50%
    10%

Question 4

  1. Company Alpha has Sales of $800,000, Sales Discounts of $40,000 and Sales Returns of $50,000.  How will this be shown on the Income Statement?
    With net sales of $710,000
    With net sales of $890,000
    With net sales of $790,000
    With net sales of $810,000
2 points

Question 5

  1. On March 1, 200X Bravo Company sells $6,000 of services on credit terms offering a 2% discount if paid within ten days. They are paid on March 3. The customer takes the discount, what is Bravo Company’s accounting entry on March 3, 200X?
    Debit cash $6,000; credit accounts receivable $6,000.
    Debit cash $5,880; credit accounts receivable $6,000.
    Debit cash $5,880; credit accounts receivable $5,880.
    Debit cash $5,880; debit sales discount $120; credit accounts receivable $6,000.
2 points

Question 6

  1. The accounting entry for a sales return includes:
    A debit to the sales account and a credit to cash.
    A credit to the sales account and a debit to cash.
    A debit to the sales return account and a credit to cash.
    A credit to inventory and a

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