Manufacturers, distributors, wholesalers, and retailers usually sell goods on credit rather than for cash. An invoice for the goods is sent, and the seller specifies payment terms on the invoice. These payment terms indicate when the invoice amount is due for payment and how much is to be paid. The business selling the goods can offer a cash discount to encourage prompt payment. This discount reduces the amount to be paid, and is based on the original amount of the invoice, the discount rate, and the timing of the payment or payments. Question: Discuss the above statement by answering the following: 1- Elucidate the importance of discount for buyers and sellers.

Manufacturers, distributors, wholesalers, and retailers usually sell goods on credit rather than for cash. An invoice for the goods is sent, and the seller specifies payment terms on the invoice. These payment terms indicate when the invoice amount is due for payment and how much is to be paid. The business selling the goods can offer a cash discount to encourage prompt payment. This discount reduces the amount to be paid, and is based on the original amount of the invoice, the discount rate, and the timing of the payment or payments. Question: Discuss the above statement by answering the following: 1- Elucidate the importance of discount for buyers and sellers.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 4MC: If a customer purchases merchandise on credit and returns the defective merchandise before payment,...

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If a customer pays with a credit card and the service has been provided, which of the following accounts will be used to record the sales entry for this transaction? A. Cost of Goods Sold, Merchandise Inventory, Sales Revenue B. Sales Revenue, Credit Card Expense, Accounts Receivable C. Accounts Receivable, Merchandise Inventory, Credit Card Expense D. Cost of Goods Sold, Credit Card Expense, Sales Revenue
A customer returns $690 worth of merchandise and receives a full refund. What accounts recognize this sales return, assuming the customer has not yet remitted payment to the retailer? A. accounts receivable, sales returns and allowances B. accounts receivable, cash C. sales returns and allowances, purchases D. sales discounts, cost of goods sold
A customer returns $870 worth of merchandise and receives a full refund. What accounts recognize this sales return (disregarding the merchandise condition entry) if the return occurs before the customer remits payment to the retailer? A. accounts receivable, sales returns and allowances B. accounts receivable, cash C. sales returns and allowances, merchandise inventory D. accounts receivable, cost of goods sold
Manufacturers, distributors, wholesalers, and retailers usually sell goods on credit rather than for cash. An invoice for the goods is sent, and the seller specifies payment terms on the invoice. These payment terms indicate when the invoice amount is due for payment and how much is to be paid. The business selling the goods can offer a cash discount to encourage prompt payment. This discount reduces the amount to be paid, and is based on the original amount of the invoice, the discount rate, and the timing of the payment or payments. Question: Discuss the above statement by answering the following: 2- Specify the type of discount debated in the statement and the required conditions to be applied.
Manufacturers, distributors, wholesalers, and retailers usually sell goods on credit rather than for cash. An invoice for the goods is sent, and the seller specifies payment terms on the invoice. These payment terms indicate when the invoice amount is due for payment and how much is to be paid. The business selling the goods can offer a cash discount to encourage prompt payment. This discount reduces the amount to be paid, and is based on the original amount of the invoice, the discount rate, and the timing of the payment or payments. Question: Discuss the above statement by answering the following: Elucidate the importance of discount for buyers and sellers. Specify the type of discount debated in the statement and the required conditions to be applied.
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If a customer purchases merchandise on credit and return the defective merchandise before payment, what accounts would recognize this transaction? Assume the perpetual inventory system is used. A.Sales Discount, Cash B.Accounts Receivable, Sales Discount C.Sales Returns and Allowances, Cash D.Accounts Receivable, Sales Returns and Allowances
If a customer pays with a credit card and the service has been provided, which of the following accounts will be used to record the sales entry for this transaction? Elaborate in your response asides from choosing the correct choice. A. Cost of Goods Sold, Merchandise Inventory, Sales Revenue B. Sales Revenue, Credit Card Expense, Accounts Receivable C. Accounts Receivable, Merchandise Inventory, Credit Card Expense D. Cost of Goods Sold, Credit Card Expense, Sales Revenue
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