Homework Answers
Ans 26: b. “a trade or purchase discount”
Explanation:
2/10 net 30 may be defined as the trade credit or trade discount in which the purchasers are entitled to receive a 2 % discount on trade credit if they make payment of the amount within 10 days. It means that if the buyers pay the invoice amount in first 10 days as per the condition, they will get the discount of 2 %. On the other hand, if the buyers fail to make payment in first 10 days, they have to pay full amount of invoice due in 30 days deprived of 2 % discount as per the terms and condition under 2/10 net 30.
Hence, we conclude that when a purchaser is presented with trade terms such as 2/10 net 30, we call this “a trade or purchase discount”
So, our Answer option is b. “a trade or purchase discount”
Ans 26: b. “a trade or purchase discount”
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26 When a purchaser is presented with trade terms such as 2/10 net 30, we call...
25 The conditions under which a firm sells its goods and services for cash or credit...
25 The conditions under which a firm sells its goods and services for cash or credit a. collection policy b terms of sale с terms of endearment d credit contract 26 When a purchaser is presented with trade terms such as 2/10 net 30, we call this a. a sales discount b a trade or purchase discount с a service contract a term contract
What is the annual cost of trade credit when the terms are 1/10, net 30? Assume...
What is the annual cost of trade credit when the terms are 1/10, net 30? Assume a year has 360 days. a. 12.1% (rounded) b. 12.3% (rounded) c. 18.2% (rounded) d. 18.4% (rounded)
11. A trade discount is: A term used by a purchaser to describe a cash discount...
11. A trade discount is: A term used by a purchaser to describe a cash discount given to customers for prompt payment. B. A reduction in price below the list price. A term used by a seller to describe a cash discount granted to customers for prompt payment. D. A reduction in price for prompt payment. E. Also called a rebate. 12. A company uses the perpetual inventory system and recorded the following entry: 2,500 50 Accounts Payable...... .................. Merchandise...
1) A) Joy company bought $8000 of merchandise on account, terms 2/10 net 30 B) Joy...
1) A) Joy company bought $8000 of merchandise on account, terms 2/10 net 30 B) Joy retumed $2000 of the merchandise C) Joy had a cash sale of $10,000; the cost of the merchandise was $4500 D) Joy sold $12,000 on account terms 1/10 net 30; cost of the merchandise was $5500 E) Paid for the purchase in A, less the return. F) Received payment from the sale in D. 2) A) BC company bought $18000 of merchandise on account,...
Calculate the annualized cost of the trade credit terms of 1/15, net 30 when payment is...
Calculate the annualized cost of the trade credit terms of 1/15, net 30 when payment is made on the net due date (assume a 365-day year).
Problem 26-08 Which of the following terms of trade credit is the more expensive? Assume there...
Problem 26-08 Which of the following terms of trade credit is the more expensive? Assume there are 365 days in a year. Round your answers to one decimal place. a. A 3 percent cash discount if paid on the 20th day with bill due on the 40th day (3/20, net 40) The simple interest rate: % The compound interest rate: % b. A 1 percent cash discount if paid on the 5th day with bill due on the 30th day...
Suppose the credit terms offered to your firm by its suppliers are 2/10, net 30 days....
Suppose the credit terms offered to your firm by its suppliers are 2/10, net 30 days. Your firm is not taking discounts, but is paying after 22 days instead of Day 30. You point out that the nominal cost of not taking the discount and paying on Day 30 is approximately 37%. But since your firm is neither taking discounts nor paying on the due date, what is the effective annual percentage cost (not the nominal cost) of its costly...
Which statement is true of an invoice with terms of 2/10 net 30?
Which statement is true of an invoice with terms of 2/10 net 30? SELECT ONLY ONE A 2% discount is applied if paid within 30 days Within 10 days, 2% of the invoice must be paid The full amount must be paid within 30 days Payment is required within 10 days A 10% discount is applied if paid within 2 days
When we express the value of a cash flow or series of cash flows in terms...
When we express the value of a cash flow or series of cash flows in terms of dollars today, we call it the ________ of the investment. If we express it in terms of dollars in the future, we call it the ________. A. future value; present value B. discount factor; discount rate C. present value; future value D. ordinary annuity; annuity due
Goods costing $1,900 are purchased on account on July 15 with credit terms of 2/10, n/30....
Goods costing $1,900 are purchased on account on July
15 with credit terms of 2/10, n/30. On July 18, the purchaser
receives a $300 credit from the supplier for damaged goods. Give
the journal entry on July 24 to record payment of the balance due
within the discount
period.
Question 11 Goods costing $1,900 are purchased on account on July 15 with credit terms of 2/10, n/30. On July 18, the purchaser receives a $300 credit from the supplier for...
25 The conditions under which a firm sells its goods and services for cash or credit a. collection policy b terms of sale с terms of endearment d credit contract 26 When a purchaser is presented with trade terms such as 2/10 net 30, we call this a. a sales discount b a trade or purchase discount с a service contract a term contract
11. A trade discount is: A term used by a purchaser to describe a cash discount given to customers for prompt payment. B. A reduction in price below the list price. A term used by a seller to describe a cash discount granted to customers for prompt payment. D. A reduction in price for prompt payment. E. Also called a rebate. 12. A company uses the perpetual inventory system and recorded the following entry: 2,500 50 Accounts Payable...... .................. Merchandise...
1) A) Joy company bought $8000 of merchandise on account, terms 2/10 net 30 B) Joy retumed $2000 of the merchandise C) Joy had a cash sale of $10,000; the cost of the merchandise was $4500 D) Joy sold $12,000 on account terms 1/10 net 30; cost of the merchandise was $5500 E) Paid for the purchase in A, less the return. F) Received payment from the sale in D. 2) A) BC company bought $18000 of merchandise on account,...
Problem 26-08 Which of the following terms of trade credit is the more expensive? Assume there are 365 days in a year. Round your answers to one decimal place. a. A 3 percent cash discount if paid on the 20th day with bill due on the 40th day (3/20, net 40) The simple interest rate: % The compound interest rate: % b. A 1 percent cash discount if paid on the 5th day with bill due on the 30th day...
Goods costing $1,900 are purchased on account on July
15 with credit terms of 2/10, n/30. On July 18, the purchaser
receives a $300 credit from the supplier for damaged goods. Give
the journal entry on July 24 to record payment of the balance due
within the discount
period.
Question 11 Goods costing $1,900 are purchased on account on July 15 with credit terms of 2/10, n/30. On July 18, the purchaser receives a $300 credit from the supplier for...
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