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- 1. Multiple Choice
This discount encourages the buyers to purchase goods because of the markdowns from the list price
Cash Discounts
Trade Discounts
Sales Discounts
- 2. Multiple Choice
Which of the following is not a reason for sales discounts to be offered to the debtors?
Increase the amount paid paid by the debtors
improve liquidity by turning the accounts receivable into cash
encourage earlier settlement of debts by debtors
reduce the level of bad debts
- 3. Multiple Choice
Conrad purchased merchandise with a list price of P60,000 from the Klean Company. Klean Company offers its customers credit terms 2/10, n/30. What amount should Conrad pay if the cash discount is taken?
59,400
60,600
58.800
61,200
- 4. Multiple Choice
Carl purchases P50,000 merchandise from the Santes Co. with terms 3/10, n/30. How much discount is Carl entitled to take if paid within the discount period?
P500
P1,000
P1,500
P3,000
- 5. Multiple Choice
The periodic inventory system provides an up-to-date amount of inventory on hand.
True
False
- 6. Multiple Choice
A physical inventory is usually taken at the end of the accounting period.
True
False
- 7. Multiple Choice
A validated deposit slip indicates that cash and checks were actually deposited.
True
False
- 8. Multiple Choice
Cash discounts are called purchase discounts from the buyer's viewpoint.
True
False
- 9. Multiple Choice
Taking a physical inventory refers to making a count of all merchandise on hand at a particular time.
True
False
- 10. Multiple Choice
Gabriela used the perpetual inventory system. Gabriela purchased merchandise with an invoice amount of P800,000, terms 2/10 n/30. If Gabriela returned merchandise worth P20,000 to the supplier, what should be the journal entry to record the return include?
Debit to Inventory P20,000
Debit to Purchase Returns & Allow. of P20,000
Credit to Inventory of P20,000
Credit to Purchase Returns & Allow. of P20,000
- 11. Multiple Choice
This is an authorization made by the buyer to the seller to deliver the merchandise as detailed in the form.
Purchase Requisition
Purchase Order
Invoice
Delivery Order
- 12. Multiple Choice
The merchandise Inventory account is not affected when a sales allowance is granted.
True
False
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