Question 1

The net price equivalent rate helps one calculate the actual cost to the seller.

Accepted Answer

A) True 
 B)False

Question 2

Walgreens is offered a chain discount on cosmetics from Libby Corp. of 8/5/2; Roma Company offers a chain discount of 7/6/4. What is the highest discount offered?

Accepted Answer

A)  .14348 
B)  .839232 
C)  .85652 
D)  .160768 
E)  None of these 
A)  .14348 
B)  .839232 
C)  .85652 
D)  .160768 
E)  None of these

Question 3

With terms of 2/10, n/30:

Accepted Answer

A)  Credit period is 10 days from date of invoice 
B)  Credit period is 40 days 
C)  Credit period extends into first 10 days of next month 
D)  Credit period is 30 days from date of invoice 
E)  None of these 
A)  Credit period is 10 days from date of invoice 
B)  Credit period is 40 days 
C)  Credit period extends into first 10 days of next month 
D)  Credit period is 30 days from date of invoice 
E)  None of these

Question 4

Those making partial payments are not allowed to take a cash discount.

Accepted Answer

A) True 
 B)False

Question 5

Trade discounts sometimes are taken on freight.

Accepted Answer

A) True 
 B)False

Question 6

If the net price of a stove is $900 and the trade discount rate is 40%, the list price is:

Accepted Answer

A)  $3,600 
B)  $2,250 
C)  $1,500 
D)  $1,260 
E)  None of these 
A)  $3,600 
B)  $2,250 
C)  $1,500 
D)  $1,260 
E)  None of these

Question 7

The complement of 17% is:

Accepted Answer

A)  71% 
B)  60% 
C)  83% 
D)  38% 
E)  None of these 
A)  71% 
B)  60% 
C)  83% 
D)  38% 
E)  None of these

Question 8

The single equivalent discount rate is found by taking the net price equivalent rate and adding it to 1.

Accepted Answer

A) True 
 B)False

Question 9

Trade discounts represent increases to the purchase price.

Accepted Answer

A) True 
 B)False

Question 10

The portion could represent the amount of trade discount in the portion formula.

Accepted Answer

A) True 
 B)False

Question 11

Trade discounts must be paid within the cash discount period.

Accepted Answer

A) True 
 B)False

Question 12

Chain discounts sometimes may be added together.

Accepted Answer

A) True 
 B)False

Question 13

4/10, n/30, ROG means a 4% discount can be taken within 10 days before the receipt of goods.

Accepted Answer

A) True 
 B)False

Question 14

Morgan Company received from Lee Company an invoice dated September 27. Terms were 2/10 EOM. List price on the invoice was $5,000 (freight not included). Morgan receives a 9/7 chain discount. Freight charges are Morgan's responsibility, but Lee agreed to prepay the $150 freight charge. Morgan pays the invoice on November 9. What does Morgan pay Lee?

Accepted Answer

The answer of Morgan Company received from Lee Company an...

Question 15

Knuckles on your hand represent months with 30 days.

Accepted Answer

A) True 
 B)False

Question 16

Al's Supply sold a chain saw to Mark's Lumber. The list price was $1,250. Al's Supply offered a chain discount of 6/3/1. What was the net price of the chain saw?

Accepted Answer

The answer of Al's Supply sold a chain saw to...

Question 17

A net price equivalent rate of .74225 means that for each $10 the buyer's cost will be approximately 74 cents.

Accepted Answer

A) True 
 B)False

Question 18

Cash discounts are not taken on freight or returned goods.

Accepted Answer

A) True 
 B)False

Question 19

Amount of trade discount is represented by the:

Accepted Answer

A)  Base 
B)  Rate 
C)  Portion 
D)  Base divided by rate 
E)  None of these 
A)  Base 
B)  Rate 
C)  Portion 
D)  Base divided by rate 
E)  None of these

Question 20

A manufacturer of skis offered chain discounts of 10/5/4 to many of its customers. Joe Jones ordered skis that had a total list price of $149,500. The amount of the trade discount is:

Accepted Answer

A)  $122,709.60 
B)  $26,970.40 
C)  $26,790.40 
D)  $122,907.69 
E)  None of these 
A)  $122,709.60 
B)  $26,970.40 
C)  $26,790.40 
D)  $122,907.69 
E)  None of these

The net price equivalent rate helps one calculate the actual cost to the seller.

Walgreens is offered a chain discount on cosmetics from Libby Corp. of 8/5/2; Roma Company offers a chain discount of 7/6/4. What is the highest discount offered?

With terms of 2/10, n/30:

Those making partial payments are not allowed to take a cash discount.

Trade discounts sometimes are taken on freight.

If the net price of a stove is $900 and the trade discount rate is 40%, the list price is:

The complement of 17% is:

The single equivalent discount rate is found by taking the net price equivalent rate and adding it to 1.

Trade discounts represent increases to the purchase price.

The portion could represent the amount of trade discount in the portion formula.

Trade discounts must be paid within the cash discount period.

Chain discounts sometimes may be added together.

4/10, n/30, ROG means a 4% discount can be taken within 10 days before the receipt of goods.

Knuckles on your hand represent months with 30 days.

Al's Supply sold a chain saw to Mark's Lumber. The list price was $1,250. Al's Supply offered a chain discount of 6/3/1. What was the net price of the chain saw?

A net price equivalent rate of .74225 means that for each $10 the buyer's cost will be approximately 74 cents.

Cash discounts are not taken on freight or returned goods.

Amount of trade discount is represented by the:

A manufacturer of skis offered chain discounts of 10/5/4 to many of its customers. Joe Jones ordered skis that had a total list price of $149,500. The amount of the trade discount is:

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Compound Interest and Present Value

Annuities and Sinking Funds

Installment Buying

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Sales, Excise, and Property Taxes

Filters

Exam 7: Discounts: Trade and Cash

The net price equivalent rate helps one calculate the actual cost to the seller.

Walgreens is offered a chain discount on cosmetics from Libby Corp. of 8/5/2; Roma Company offers a chain discount of 7/6/4. What is the highest discount offered?

With terms of 2/10, n/30:

Those making partial payments are not allowed to take a cash discount.

Trade discounts sometimes are taken on freight.

If the net price of a stove is $900 and the trade discount rate is 40%, the list price is:

The complement of 17% is:

The single equivalent discount rate is found by taking the net price equivalent rate and adding it to 1.

Trade discounts represent increases to the purchase price.

The portion could represent the amount of trade discount in the portion formula.

Trade discounts must be paid within the cash discount period.

Chain discounts sometimes may be added together.

4/10, n/30, ROG means a 4% discount can be taken within 10 days before the receipt of goods.

Knuckles on your hand represent months with 30 days.

Al's Supply sold a chain saw to Mark's Lumber. The list price was $1,250. Al's Supply offered a chain discount of 6/3/1. What was the net price of the chain saw?

A net price equivalent rate of .74225 means that for each $10 the buyer's cost will be approximately 74 cents.

Cash discounts are not taken on freight or returned goods.

Amount of trade discount is represented by the:

A manufacturer of skis offered chain discounts of 10/5/4 to many of its customers. Joe Jones ordered skis that had a total list price of $149,500. The amount of the trade discount is:

Whole Numbers: How to Dissect and Solve Word Problems

Fractions

Decimals

Banking

Solving for the Unknown: a How-To Approach for Solving Equations

Percents and Their Applications

Markups and Markdowns: Perishables and Breakeven Analysis

Payroll

Simple Interest

Promissory Notes, Simple Discount Notes, and the Discount Process

Compound Interest and Present Value

Annuities and Sinking Funds

Installment Buying

The Cost of Home Ownership

How to Read, Analyze, and Interpret Financial Reports

Depreciation

Inventory and Overhead

Sales, Excise, and Property Taxes

Filters