Question 1

A cash discount is a reduction from the gross amount of the invoice if payment is made within the discount period.

Accepted Answer

A) True 
 B)False

Question 2

2/10, n/30, ROG means the cash discount period ends:

Accepted Answer

A) Within 10 days of beginning date of invoice 
B) Within 30 days of beginning date of invoice 
C) 20 days after beginning date of invoice 
D) 10 days after the goods are received 
E) None of these 
A) Within 10 days of beginning date of invoice 
B) Within 30 days of beginning date of invoice 
C) 20 days after beginning date of invoice 
D) 10 days after the goods are received 
E) None of these

Question 3

A dining room set lists for $1,500 and carries a trade discount of 40%. Freight charges are $150. Calculate the final price of the dining room set.

Accepted Answer

Multiply the list price of $1,500 by 40%

Question 4

Roland Corporation buys stoves from a wholesaler. The list price of a stove is $900, with a trade discount of 30%. The net price is:

Accepted Answer

A) $270 
B) $1,170 
C) $630 
D) $360 
E) None of these 
A) $270 
B) $1,170 
C) $630 
D) $360 
E) None of these

Question 5

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

Accepted Answer

A) $360 
B) $2,250 
C) $1,500 
D) $540 
E) None of these 
A) $360 
B) $2,250 
C) $1,500 
D) $540 
E) None of these

Question 6

Pete's Appliance received a bill dated July 15 for $26,000 with terms of 2/10, 1/15, n/60. On July 27 Pete's sent in a partial payment of $6,000. What is the amount credited as well as the balance due?

Accepted Answer

Divide $6,000 by .99 because t

Question 7

The complement of 10% is 90%, or in decimal 0.90.

Accepted Answer

A) True 
 B)False

Question 8

The credit period is:

Accepted Answer

A) Always shorter than the discount period 
B) Always 30 days from end of discount 
C) Always twice the length of discount period 
D) Long enough so buyers can always take a cash discount 
E) None of these 
A) Always shorter than the discount period 
B) Always 30 days from end of discount 
C) Always twice the length of discount period 
D) Long enough so buyers can always take a cash discount 
E) None of these

Question 9

The net price equivalent rate of 3/7/13 is:

Accepted Answer

A) 0.0273 
B) 0.784827 
C) 0.488173 
D) 215173 
E) None of these 
A) 0.0273 
B) 0.784827 
C) 0.488173 
D) 215173 
E) None of these

Question 10

The actual credit one receives in making a partial payment is calculated by taking the partial payment and dividing by (1 + the discount rate).

Accepted Answer

A) True 
 B)False

Question 11

If a manufacturer's list price is $800 and Bill's Outlet buys the goods for $650, what is the trade discount percent? (Round answer to the nearest hundredth percent.)

Accepted Answer

Find the difference between th

Question 12

Trade discounts must be paid within the cash discount period.

Accepted Answer

A) True 
 B)False

Question 13

FOB shipping point means the seller pays cost of freight.

Accepted Answer

A) True 
 B)False

Question 14

Match the following terms with their definitions.
-Complement

Accepted Answer

A) Criteria on invoice 
B) Seller pays cost of freight 
C) Could be calculated by table look-up 
D) Savings from early payment 
E) Cash discount within first 10 days in next month after sale
F)Amount of time to take advantage of a cash discount
G)Discount period begins when goods are received
H)100% less stated percent
I)List price minus amount of trade discount
J)Time period sellers give buyers to pay invoices
K)1 - net price equivalent rate
L)Buyer pays cost of freight
M)Actual cost to buyer per dollar
N)2/10, n/30
O)Two or more trade discounts
P)List price minus net price
Q)Suggested retail price 
A) Criteria on invoice 
B) Seller pays cost of freight 
C) Could be calculated by table look-up 
D) Savings from early payment 
E) Cash discount within first 10 days in next month after sale
F)Amount of time to take advantage of a cash discount
G)Discount period begins when goods are received
H)100% less stated percent
I)List price minus amount of trade discount
J)Time period sellers give buyers to pay invoices
K)1 - net price equivalent rate
L)Buyer pays cost of freight
M)Actual cost to buyer per dollar
N)2/10, n/30
O)Two or more trade discounts
P)List price minus net price
Q)Suggested retail price

Question 15

Match the following terms with their definitions.
-2/10, EOM (before 25th)

Accepted Answer

A) Criteria on invoice 
B) Seller pays cost of freight 
C) Could be calculated by table look-up 
D) Savings from early payment 
E) Cash discount within first 10 days in next month after sale
F)Amount of time to take advantage of a cash discount
G)Discount period begins when goods are received
H)100% less stated percent
I)List price minus amount of trade discount
J)Time period sellers give buyers to pay invoices
K)1 - net price equivalent rate
L)Buyer pays cost of freight
M)Actual cost to buyer per dollar
N)2/10, n/30
O)Two or more trade discounts
P)List price minus net price
Q)Suggested retail price 
A) Criteria on invoice 
B) Seller pays cost of freight 
C) Could be calculated by table look-up 
D) Savings from early payment 
E) Cash discount within first 10 days in next month after sale
F)Amount of time to take advantage of a cash discount
G)Discount period begins when goods are received
H)100% less stated percent
I)List price minus amount of trade discount
J)Time period sellers give buyers to pay invoices
K)1 - net price equivalent rate
L)Buyer pays cost of freight
M)Actual cost to buyer per dollar
N)2/10, n/30
O)Two or more trade discounts
P)List price minus net price
Q)Suggested retail price

Question 16

Jones Manufacturing sent Blue Company an invoice for equipment with a list price of $10,000. The invoice is dated July 27 with terms of 2/10, EOM. Blue Company is entitled to a 40% trade discount. If the invoice is paid on September 8, how much does Blue pay?

Accepted Answer

Since the invoice is dated after the 25^th

Question 17

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 18

Match the following terms with their definitions.
-Net price

Accepted Answer

A) Criteria on invoice 
B) Seller pays cost of freight 
C) Could be calculated by table look-up 
D) Savings from early payment 
E) Cash discount within first 10 days in next month after sale
F)Amount of time to take advantage of a cash discount
G)Discount period begins when goods are received
H)100% less stated percent
I)List price minus amount of trade discount
J)Time period sellers give buyers to pay invoices
K)1 - net price equivalent rate
L)Buyer pays cost of freight
M)Actual cost to buyer per dollar
N)2/10, n/30
O)Two or more trade discounts
P)List price minus net price
Q)Suggested retail price 
A) Criteria on invoice 
B) Seller pays cost of freight 
C) Could be calculated by table look-up 
D) Savings from early payment 
E) Cash discount within first 10 days in next month after sale
F)Amount of time to take advantage of a cash discount
G)Discount period begins when goods are received
H)100% less stated percent
I)List price minus amount of trade discount
J)Time period sellers give buyers to pay invoices
K)1 - net price equivalent rate
L)Buyer pays cost of freight
M)Actual cost to buyer per dollar
N)2/10, n/30
O)Two or more trade discounts
P)List price minus net price
Q)Suggested retail price

Question 19

Calculate the End of Discount Period and End of Credit Period.
 $$\begin{array} { | l | l | l | l | } 
\hline\text { Date of Invoice } & \text { Terms } & \text { End of Discount Period } & \text { End of Credit Period } \
\hline \text { Nov } 12 & 2 / 10 \mathrm { EOM } & ? & ?\
\hline
\end{array}$$

Accepted Answer

The answer of Calculate the End of Discount Period and...

Question 20

Match the following terms with their definitions.
-FOB destination

Accepted Answer

A) Criteria on invoice 
B) Seller pays cost of freight 
C) Could be calculated by table look-up 
D) Savings from early payment 
E) Cash discount within first 10 days in next month after sale
F)Amount of time to take advantage of a cash discount
G)Discount period begins when goods are received
H)100% less stated percent
I)List price minus amount of trade discount
J)Time period sellers give buyers to pay invoices
K)1 - net price equivalent rate
L)Buyer pays cost of freight
M)Actual cost to buyer per dollar
N)2/10, n/30
O)Two or more trade discounts
P)List price minus net price
Q)Suggested retail price 
A) Criteria on invoice 
B) Seller pays cost of freight 
C) Could be calculated by table look-up 
D) Savings from early payment 
E) Cash discount within first 10 days in next month after sale
F)Amount of time to take advantage of a cash discount
G)Discount period begins when goods are received
H)100% less stated percent
I)List price minus amount of trade discount
J)Time period sellers give buyers to pay invoices
K)1 - net price equivalent rate
L)Buyer pays cost of freight
M)Actual cost to buyer per dollar
N)2/10, n/30
O)Two or more trade discounts
P)List price minus net price
Q)Suggested retail price

Exam 7: Discounts: Trade and Cash

A cash discount is a reduction from the gross amount of the invoice if payment is made within the discount period.

2/10, n/30, ROG means the cash discount period ends:

A dining room set lists for $1,500 and carries a trade discount of 40%. Freight charges are $150. Calculate the final price of the dining room set.

Roland Corporation buys stoves from a wholesaler. The list price of a stove is $900, with a trade discount of 30%. The net price is:

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

Pete's Appliance received a bill dated July 15 for $26,000 with terms of 2/10, 1/15, n/60. On July 27 Pete's sent in a partial payment of $6,000. What is the amount credited as well as the balance due?

The complement of 10% is 90%, or in decimal 0.90.

The credit period is:

The net price equivalent rate of 3/7/13 is:

The actual credit one receives in making a partial payment is calculated by taking the partial payment and dividing by (1 + the discount rate).

If a manufacturer's list price is $800 and Bill's Outlet buys the goods for $650, what is the trade discount percent? (Round answer to the nearest hundredth percent.)

Trade discounts must be paid within the cash discount period.

FOB shipping point means the seller pays cost of freight.

Match the following terms with their definitions. -Complement

Match the following terms with their definitions. -2/10, EOM (before 25th)

Jones Manufacturing sent Blue Company an invoice for equipment with a list price of $10,000. The invoice is dated July 27 with terms of 2/10, EOM. Blue Company is entitled to a 40% trade discount. If the invoice is paid on September 8, how much does Blue pay?

The complement of 17% is:

Match the following terms with their definitions. -Net price

Calculate the End of Discount Period and End of Credit Period. Date of Invoice Terms End of Discount Period End of Credit Period Nov 12 2/10 ? ?

Match the following terms with their definitions. -FOB destination

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Match the following terms with their definitions. -2/10, EOM (before 25^th)